G20 ministers deny rift over fighting credit crisis

Britain and France\’s finance ministers played down talk of a transatlantic rift on fighting the credit crisis, as they and colleagues to prepare for next month\’s vital G20 summit.


Ministers from the Group of 20 industrialised and emerging market countries hold talks officially starting Saturday ahead of a summit of world leaders including new US President Barack Obama in London on April 2.

Focus on support

“I don\’t actually think that the divisions between the European countries and the US are anything like what has been described over the last few days,” the meeting\’s host, British finance minister Alistair Darling, told BBC radio.

“I think on both sides of the Atlantic — and also, for that matter, in other parts of the world — there is a commitment to ensure that we support people, support businesses and our economies.”

All the politicians come together face to face for the first time for dinner at the luxury hotel outside London where the event is being held.

While the United States, the world\’s biggest economy, wants a coordinated international stimulus, most of Europe is suspicious of such a move and favours tightening regulation of financial markets and institutions.

In a boost for the United States, Japan and China — the world\’s second and third largest economic powerhouses — also embraced stimulus Friday.

Recovery plans at odds

Senior US officials including Obama\’s top economic adviser Larry Summers have recently said leading nations must try to jumpstart a global recovery by pumping more money into their economies.

But that has not been welcomed in Europe, where many leaders do not want more spending amid big budget deficits.

France and Germany have agreed to join forces to urge tighter regulation instead of more spending. Chancellor Angela Merkel said Friday: “We do not think much of the idea of a new package of measures” to underpin the economy.

Bank secrecy targeted

There was some good news for France and Germany on regulation Friday as Switzerland, Luxembourg and Austria said they would relax their sensitive bank secrecy laws, the day after similar moves by Belgium, Liechtenstein and Andorra. Monaco also intimated it would follow suit.

Berlin and Paris have been leading the charge to clamp down on tax havens.

East in favour of stimulus

China and Japan, meanwhile, embraced further spending to fight the economic fire Friday.

Japan\’s premier Taro Aso ordered a new stimulus package worth a reported200 billion dollars, while China\’s Wen Jiabao said Beijing had “adequate ammunition which means that at any time we can introduce new stimulus policies.”

Japan\’s Finance Minister Kaoru Yosano told the Financial Times newspaper in an interview published Friday that reviving the world economy, not regulation, must be the G20\’s priority.

“We all agree (on the need for better regulation), but I personally feel: are these actions necessary at a time of crisis?” he said.

“What we ask at this moment is to save the life of the world economy – not to comment about its beard.”

World Bank head Robert Zoellick, who is also attending the meeting, warned that “2009 is shaping up to be a very dangerous year” for the global economy.

French Finance Minister Christine Lagarde, arriving for the talks, said she was “very optimistic” about the meeting, stressing it was a question of finding “the best compromise between our different positions.”