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Obama derides ‘phony’ stories on G20 split

Published on 16/03/2009

Washington — US President Barack Obama on Saturday denied there were splits between G20 nations on how to rescue the global economy, deriding such a notion as a "phony" story drummed up by the media.

Obama’s forceful comments at the White House came shortly after US Treasury Secretary Timothy Geithner said at a G20 finance ministers meeting in Britain there had been "unprecedented" global action on the crisis.

They also followed signs that while the United States pushed for a more robust set of stimulus plans to reignite demand, some European allies appeared keener to prioritize finance sector regulation.

"I don’t know where this notion has emerged that somehow there are sides developing with respect to the G20," Obama told reporters after meeting Brazil’s President Luiz Inacio Lula da Silva at the White House. "They are not emerging from Tim Geithner, they are not coming from (top economic advisor) Larry Summers, they are not coming from me. Unless you have some secret source in the administration … if you will follow the track of this storyline, it is completely contrary to what our policies are."

"I can’t be clearer in saying there are not sides," he added. "This is a phony debate which I think has evolved over the last few days in the news cycle."

Obama will be a key player at the G20 summit of developed and developing nations in London on April 2, aimed at coordinating world efforts to fight the worst economic slump in generations.

Obama maintained there was no conflict between calls for coordinated fiscal stimulus plans to ignite demand and greater regulation of the global finance industry and capital flows.

"This is not an either or question," he said, adding that it was important for all countries to work out how to counter "the drastic contraction in global demand."

Obama, who pushed through a 787 billion dollar stimulus plan in the early weeks of his presidency, argued that British Prime Minister Gordon Brown, Chinese President Hu Jintao and Australian Prime Minister Kevin Rudd all agreed with his approach.

The president also backed the formation of some kind of "international body" to account for how much money had been spent on stimulus plans around the world, and cautioned that not every nation would take the same approach.

In remarks apparently aimed at nations such as Germany which have expressed reservations about mounting fresh new stimulus plans, he said he would also vigorously push for new regulations.

"In my mind, at least, there is not no conflict or contradiction between the positions of the G20 countries in how we are going to be moving forward — there are going to be differences in details — they are being worked out now."

Earlier, G20 finance ministers meeting outside London vowed to take "whatever action is necessary" on the world economic slowdown, after talks paving the way for the summit.

"We’re prepared to take whatever action is necessary to ensure growth is restored and we’re committed to do that for however long it takes," said British finance minister Alistair Darling, who hosted the talks.

The ministers of developed and developing nations agreed on the need for an "urgent" and substantial funding boost for the International Monetary Fund (IMF), although a communique issued afterwards did not mention a figure.

They also agreed to tougher regulation of the financial system.

But the meeting failed to reach consensus on a new stimulus package, despite calls from the US, the world’s largest economy, for coordinated international pump-priming in recent days.

Stephen Collinson/AFP/Expatica