Group of 20 leaders get to work at crisis summit
Leaders of the world’s rich and major developing countries began talks aimed at agreeing a new deal on the global economy at a crisis summit in London on Thursday, hoping to clear up divisions over how far to go with tougher financial regulation.world Updated: Apr 02, 2009 14:59 IST
Leaders of the world’s rich and major developing countries began talks aimed at agreeing a new deal on the global economy at a crisis summit in London on Thursday, hoping to clear up divisions over how far to go with tougher financial regulation.
As President Barack Obama and British Prime Minister Gordon Brown joined other leaders at a working breakfast at the ExCel center in the city’s east Docklands district, protesters began gearing up for a second day of demonstrations, gathering outside the London Stock Exchange near St. Paul’s Cathedral.
Obama and Brown have expressed confidence that world leaders will come up with a strong agreement to address financial regulation, growth, and troubled banks. But French President Nicolas Sarkozy and German Chancellor Angela Merkel have refused calls for more government spending, and said the meeting must take concrete steps on tougher financial regulation.
Sarkozy has toned down his earlier threat to walk out of the conference, and Obama could be seen chatting informally with Merkel at a leaders’ dinner Wednesday evening.
British Business Minister Peter Mandelson said the Group of 20 countries were in broad agreement to put more resources into the international economy through the International Monetary Fund and other international financial institutions.
“I’m not saying that everything is sewn up. It isn’t,” Mandelson told BBC radio. “I mean there are arguments, or some tensions over precisely what resources we’re talking about.”
Obama has acknowledged that U.S. regulatory failures contributed to the crisis in the financial system, but urged a focus on solutions, saying “We can only meet this challenge together.”
He added that differences in the grouping had been “vastly overstated” and he played down an earlier U.S. push for bigger government spending by European governments; instead he praised their efforts.
Brown foreshadowed agreement on issues including a possible $100 billion increase in financing needed to keep global trade moving, and support for economic growth and job creation. G-20 leaders are also in general agreement on a plan to boost the funds available to the IMF to help out emerging countries.
European leaders have balked at moving beyond spending measures already announced, arguing that their more generous welfare systems mean their spending level will rise as more people get benefits such as unemployment insurance.
Sarkozy and Merkel have tried to push regulation to the fore, calling for new scrutiny of ratings agencies and lightly regulated hedge funds. The summit will also examine ways to get so-called toxic assets _ unsellable securities such as mortgage-backed bonds _ off banks’ balance sheet where they are impeding lending to consumers and businesses.
As leaders met in the Docklands, a former shiploading area on the Thames that was redeveloped for business use by the government in the 1980s and 1990s, protesters began a second day of demonstrations. Dozens were arrested in clashes on Wednesday.
Security was tight at the summit venue; hundreds of police manned barriers and checkpoints around the security perimeter.
About a hundred more police officers guarded the London Stock Exchange near St. Paul’s Cathedral in the financial district, watching a group of protesters playing a giant Monopoly game.
Some 4,000 anarchists, anti-capitalists, environmentalists and others clogged the area near the Bank of England on Wednesday for what demonstrators had called “Financial Fool’s Day.” In sometimes violent clashes, one man collapsed and died and police made 86 arrests.