World attention will be focused on the global economy like never before today, thanks to television coverage of the London summit here of the Group of 20 leaders who till late Wednesday did not get past their differences and agree on ways to haul the world out of the deepest downturn since the 1930s. Differences emerged between the United States and Britain on one side and France and Germany on the other over how to ease the global slowdown. But late Wednesday, all the G20 leaders gathered at Buckingham Palace for a reception hosted by Queen Elizabeth II, before a dinner at British Prime Minister Gordon Brown's Downing Street home. US President Barack Obama played down the differences at a press conference here, saying that there was “enormous consensus” on the proposals the G20 is expected to make. “The core notion that government has to take some steps to deal with a contracting global market place and that we should be promoting growth -- that's not in dispute,” Obama said at the news conference with Brown. “On the regulatory side, this notion that somehow there are those who are pushing for regulation and those who are resisting regulation is belied by the facts,” he said. But Obama also warned that the US could no longer be counted on to be the “voracious consumer” which would lead worldwide growth. French President Nicolas Sarkozy and German Chancellor Angela Merkel said they were not happy with the draft proposals for the summit, and vowed to stand together to press for “non-negotiable” new global finance rules. “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 here, after an earlier threat to walk out of the summit. Merkel said world powers could not wait until a subsequent meeting to take action, and insisted “we must not be content with generalizations” in the final communique the G20 leaders are to draw up. Brown held telephone talks with Sarkozy Wednesday and agreed on the need for tougher world finance rules, but not on the final communique, the French presidency said. Sarkozy and Merkel are pushing hard for visible results on regulation, such as closer tabs on hedge funds and credit rating agencies, and naming and shaming of tax havens if they fail to bow to pressure and end bank secrecy. Brown sees likely agreement on a possible $100 billion boost for global trade, financial regulation, and support for economic growth and job creation. News was leaked that Brown wants from the G20 countries $14 trillion in incentives to accelerate the global economy while Merkel wants to see the performance of previous incentives before injection of funds. While Washington, London and Tokyo favor pumping more money into economies to spur growth, Continental European nations are skeptical about spending more than they have and say tighter global financial regulation is the priority. The G20 leaders are expected to more than double the $250 billion available to the International Monetary Fund to help emerging markets pushed to the brink. Reports said the leaders could agree on giving the IMF a greater role in monitoring banks' risks besides issuing a package of legislations and procedures to strengthen global cooperation in financial and banking services. Japanese Prime Minister Taro Aso was quoted as saying that Germany did not understand the importance of fiscal stimulus. Those are not the only demands. China and Russia want the West to give them more say over matters of global economic importance and have gone as far as to suggest the dollar should one day be dropped as the world's main reserve currency, though the latter is not seen as an issue the summit will broach in any depth. China and Russia want a new global currency, called the “globo”, to replace the dollar. The rest of the developing world is hoping aid flows will not dry up as governments elsewhere pump trillions of dollars of public money into bank rescues and tax breaks or fork out on big building projects to support demand and jobs. Skeptics expect the G20 leaders to come up with ‘half-way solutions” serving their own interests while the “southern hemisphere” countries keep paying the price of the mistakes made by the “northern hemisphere” countries.
