French walkout threat builds pressure before G20 summit

London — A French threat to walk out of this week’s G20 summit ratcheted up pressure on world leaders Tuesday, as they arrived for talks clouded by US-Europe strains over how to ease the global economic crisis.

The move came as British Prime Minister Gordon Brown, host of Thursday’s crunch one-day meeting, launched a final 48 hours of public speeches and private diplomacy as he seeks to bridge the gaps between major players.

He said the summit should restore morality to the bruised world financial system through better regulation and announced it would unveil new international rules on bankers’ pay.

"The unsupervised globalisation of our financial markets did not only cross national boundaries — it crossed moral boundaries," Brown added.

The G20 will discuss issues including giving more cash to the International Monetary Fund (IMF) to help struggling states, tightening financial sector regulation and boosting world trade.

But calls by the US — whose President Barack Obama was due to touch down later Tuesday — for a coordinated fiscal stimulus are causing tension with European nations like France and Germany which are strongly opposed.

France raised the stakes Tuesday after Finance Minister Christine Lagarde said President Nicolas Sarkozy was prepared to walk out of the talks if they did not reach an accord with which it agreed.

"President Sarkozy was very clear on that front — he said if the deliverables are not there, I won’t sign the communique," Lagarde told BBC television. "It means walking away. I think he’s very determined."

Sarkozy himself said there was "no choice" but for the meeting to get results, adding: "The crisis is too serious for us to hold a summit for nothing."

As the host of the meeting, Brown — who is struggling in opinion polls here ahead of a general election that must be held by mid-2010 — has much riding on a successful outcome.

He is "working the phones very hard at the moment", his spokesman said Tuesday, adding: "We have made a huge amount of progress in recent weeks towards agreeing a consensus but clearly there’s more to do."

Brown emphasised the need for regulation to have a moral dimension during a speech at London’s historic Saint Paul’s Cathedral.

"Most people want a market that is free, but not values-free, a society that is fair but not laissez-faire," he said, in an address peppered with religious references and watched by Australian premier Kevin Rudd and Bishop of London Richard Chartres.

"And so across the world, our task is to agree global economic rules that reflect our enduring values."

Although the summit itself is Thursday, business gets under way Wednesday with bilaterals between leaders including keenly-watched first meetings between Obama and Chinese President Hu Jintao, plus Russian President Dmitry Medvedev.

Wednesday is also likely to be marked by major protests about the state of the world financial system in London, and Brown has warned that "no violence can be tolerated."

More than 2,500 officers will be on duty to counter the threat of violence at the G20.

Another issue likely to be on the agenda at the summit is boosting world trade, which has been badly hit by the slowdown.

The World Trade Organisation (WTO) said this month that exports would fall around nine percent in 2009, the biggest contraction since World War Two.

World Bank chief Robert Zoellick urged G20 leaders to back a new 50-billion-dollar (38-billion-euro) trade liquidity fund and warned again that 2009 would be a "dangerous year."

"This is not a moment for complacency. It is not a day for expressing false confidence that all has been done that can be done. It is not a time for narrow nationalist or even regional responses," he added.

Katherine Haddon/AFP/Expatica