LONDON (AP) - Doggedly optimistic in the face of doubts,
President Barack Obama and British Prime Minister Gordon Brown
predicted Thursday's emergency G-20 economic summit would produce a significant global deal to tackle the deepening worldwide
Others weren't so sure. France warned on Wednesday that neither
it nor Germany would agree to "false compromises" that soft-pedal
a need for tougher financial regulation to curb abuses that
contributed to the spreading chaos. And outside the carefully
scripted meetings, protesters smashed bank windows and pelted
police with eggs and fruit.
Thousands surged into London's financial district, blockading
the Bank of England and breaking into a branch of the Royal Bank of
Scotland. Elsewhere, however, inside the meetings, Obama said
differences among the presidents and prime ministers of the Group
of 20 rich and emerging countries, were "vastly overstated."
"I am absolutely confident that this meeting will reflect
enormous consensus about the need to work in concert to deal with
these problems," said Obama, who is under pressure to make a good
showing in his first major international appearance.
With economic chaos spreading, Brown, the host of the summit,
predicted agreement on a coordinated strategy, including a possible
$100 billion fund to finance global trade, tighter financial rules
and action to support economic growth and job creation.
G-20 leaders are also in general agreement on a plan to double
the money available to the International Monetary Fund, to some
$500 billion, to help emerging countries.
Consensus on further measures is by no means clear.
Brown initially trumpeted the gathering as "a new Bretton Woods
- a new financial architecture for the years ahead." But the
meeting so far bears little similarity to the 1944 New Hampshire
conference where the eventual winners of World War II gathered to
set postwar global monetary and financial order.
Washington has eased off on its push for other governments to
pump more money into economic stimulus programs after heavy
opposition from European countries, who contend their bigger social
safety nets make more spending unnecessary.
Germany and France have instead campaigned for tougher rules to
restrain financial market excesses.
That disagreement has lowered expectations for the London summit
and weakened confidence in the world's ability to quickly pull out
of the downturn.
Global trade is plummeting, protectionism is beginning to make
inroads and unemployment is rising.
French leader Nicolas Sarkozy, who had earlier implied he might
walk out if key demands on tighter regulation were not met,
presented a more conciliatory stance at a joint London news
conference with German Chancellor Angela Merkel, saying he had
"confidence in Obama."
He still warned, however, that France nor Germany would reject
"false compromises" and considered concrete steps on tax havens,
hedge funds and ratings agencies crucial.
Paris and Berlin want definitive agreements on a crackdown on
tax havens and action on other regulatory issues, rather than
simple commitments to reform. The summit is also expected to
consider lightly regulated hedge funds and how to clear bank
balance sheets of shaky securities.
Sarkozy said that "without new regulation there will be no
confidence. it's a major non-negotiable objective."
Merkel said both she and Sarkozy had come to London "in a very
constructive mood." But she said, "We do not want results that
have no impact in practice."
Even free trade remains the subject of potentially bitter
In their meeting in November, the G-20 members vowed to avoid
protectionism that could stifle trade. But since then, 17 have
acted to pass subsidies to protect their own industries or limit
imports, according to the World Bank.
On Wednesday, leaders met in a series of bilateral meetings
behind closed doors to try close the gap on key issues. They
assembled for a formal dinner Wednesday evening before business
meetings on Thursday.
Another growing concern for the conference is the plight of
developing countries, amid growing fears that the heavy toll
exacted by the global economic crisis on those nations could come
with a heavy human and political toll.
U.N. Secretary-General Ban Ki-moon has written to leaders to
urge them to approve a $1 trillion stimulus plan for developing
countries and urge the G-20 countries to back away from damaging
It remains to be seen if the leaders will be able to avoid a
repeat of the last time that London hosted a world economic summit
- the 1933 World Economic Conference that tried to agree to plans
to revive the global economy in the midst of the Great Depression.
Many commentators blame the collapse of that gathering -
torpedoed in part by the recalcitrance of new President Franklin D.
Roosevelt to make agreements that would restrict his freedom to act
on the U.S. economy - for the subsequent erection of international
trade barriers, continued competitive currency devaluation and