G20 summit seeks answers

April 2, 2009 12:00 am

, LONDON, Apr 2 – World leaders hammered out a rescue plan to save the global economy as they gathered at one of the most important summits of recent decades.

More than 20 presidents and prime ministers went to a conference centre in the London Docklands in a bid to restore confidence after a buildup marked by differences over how to end the international massacre of jobs and reforming the financial system, as well as a riot in the British capital.

One man died in anti-capitalism protests on Wednesday in which demonstrators surrounded the Bank of England and smashed the windows of a nearby bank. Police made scores of arrests.

Security forces created a ring of steel around the Group of 20 summit venue where US President Barack Obama and other leaders of countries which account for more than 80 percent of the world economy struggled to surmount divisions on the best way to ease the slowdown.

Rifts persisted on protectionism, a new rule book for international finance and stimulus measures.

Before the haggling began, leaders swapped views on the crisis at a sparkling reception hosted by Queen Elizabeth II at Buckingham Palace on Wednesday night, followed by a dinner at Prime Minister Gordon Brown’s residence.

France and Germany have demanded tough action by G20 leaders on regulation of global finance. Obama warned the United States could no longer be counted on to be the "voracious consumer" to drive worldwide growth.

French President Nicolas Sarkozy and German Chancellor Angela Merkel raised fears that the summit could fail by saying they were not happy with draft conclusions distributed ahead of meeting.

They vowed to stand together to press for "non-negotiable" new global finance rules and resisted pressure – notably from the United States and Japan – to pledge new stimulus measures to jumpstart their sputtering economies.

"Without new regulations there will be no confidence. And without confidence there will be no recovery. It’s a major aim, non-negotiable," Sarkozy told reporters at a joint press conference with Merkel.

When asked about his threat to walk out of the summit if leaders failed to agree on sufficient new regulations, he said: "This is a historic moment and we cannot run away."

Obama and Brown played down the differences but not the scope of the crisis that the summit will have to confront.

"Make no mistake, we are facing the most severe economic crisis since World War II, and the global economy is now so fundamentally interlinked that we can only meet this challenge together," the US leader said.

Obama has said stimulus and regulation are needed but that the United States could not shoulder all responsibility for generating new growth.

"Everybody is going to have to pick up the pace and I think that there is a recognition based on the conversations that I’ve had with leaders around the world that that is important," he said.

UN Secretary General Ban Ki-moon warned in Britain’s Guardian that more than economics was at stake in London.

He said that unless decisive action was taken, the crisis could lead to a "growing social unrest, weakened governments and angry publics who have lost all faith in their leaders and their own future."

But Brazilian President Luiz Inacio Lula da Silva, who raised eyebrows last week by blaming "white people with blue eyes" for the global economic crisis, tried to dampen expectations ahead of the summit.

"We cannot leave with nothing," he said, noting that traders around the world were looking to London for a sign. "We can only hope for the best possible agreement."

Obama held his first face-to-face meetings with Russia’s President Dmitry Medvedev and China’s President Hu Jintao in London Wednesday.

After talks with Hu, Obama pledged to support global trade and investment flows and work to resist protectionism.

China has blamed the United States for criticism over protectionist measures and it wants to use the summit to re-balance the world economy more in favour of the emerging powers.

Hu also met Sarkozy late Wednesday in a first step at healing a rift over Tibet.


Latest Articles

Most Viewed