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G20 leaders talk tough ahead of summit

Published on 25/09/2009

Pittsburgh -- Leaders of the world's top economic powers promised tough action to police financial markets and prevent a new economic crash Thursday as they gathered for the G20 summit.

The US city of Pittsburgh mounted a massive security operation as it prepared to welcome incoming heads of state for a meeting set to be dominated by banker bonuses, stimulus "exit strategies" and rebalancing world growth.

Thousands of police deployed behind steel barriers to protect the summit venue, as streets were closed and shop windows boarded over in case of violent protests.

Hardline demonstrators have vowed to march on the summit venue at the David Lawrence Convention Centre to vent their anger at the two-day meeting of the so-called Group of 20 leading economies opening Thursday evening.

"In Pittsburgh, we will work with the world’s largest economies to chart a course for growth that is balanced and sustained," US President Barack Obama told the United Nations on the eve of hosting his first major summit.

"And that means… strengthening regulation for all financial centres, so that we put an end to the greed, excess and abuse that led us into disaster, and prevent a crisis like this from ever happening again."

German Chancellor Angela Merkel echoed his call for thorough regulation.

"Pittsburgh will be a decisive milestone in determining whether the issue of financial market regulation remains a central issue. For us this is the most important issue at this meeting," she told reporters.

But Merkel also said she would resist expected moves by others, including the United States, to shift the focus of the meeting to imbalances in the global economy, including Germany’s trade surplus.

"I have the impression that we are on the right path but at any time the impetus might weaken. Therefore we will really press for this not to happen," she told a press conference before leaving Berlin.

The summit of the world’s 19 biggest developed and emerging economies plus the European Union comes just over a year after a US credit collapse triggered a global economic slowdown.

It also comes six months after the same G20 chiefs met in London to coordinate their response to the crisis, and their performance in Pittsburgh will be judged in part on whether they have lived up to their earlier promises.

International Monetary Fund spokeswoman Caroline Atkinson, addressing a news conference in Washington ahead of the summit, said G20 leaders had implemented many promises but needed to stay focused on nurturing a lasting recovery.

"I expect leaders this time will be focused on what they need to do and what the world needs to do to make sure that the recovery we’re seeing the beginnings of now is one that’s sustained."

Summit delegates have all vowed to take tough and lasting measures to bring order back to the markets, shore up failing institutions, save jobs and rekindle growth, but each arrives in Pittsburgh with their own priorities.

French President Nicolas Sarkozy said Wednesday he would push other nations to impose sanctions on uncooperative tax havens starting next year.

"Tax havens, banking secrecy, that’s all over," he told French television. "I will fight for sanctions tomorrow in Pittsburgh."

Last week, France and Germany pressed for caps on bankers’ bonuses, amid opposition from Britain and the United States, but a watered-down compromise deal appears likely to be reached, officials said.

Emerging economies, led by India, want billions of dollars in subsidies from the developed world to help them convert to greener technologies if they are to sign up to a deal at a key climate summit in Copenhagen in December.

Aside from financial regulation and climate change, the summit is also expected to discuss when and how to begin scaling back the multi-trillion dollar stimulus packages countries established to fight the recession.

Japan and Europe have begun to edge out of the slump and are starting to look at cuts — cheered on by China, which fears US deficits will destabilize the dollar — but others feel such a move would be premature.

Ahead of the talks, global ratings agency Fitch warned the G20 economies — including the United States, Britain, France, Germany and Spain — could endanger their credit worthiness if they do not bring down public debt.

Dave Clark/AFP/Expatica