Bonds News

UPDATE 2-G20 summit will not demand spending pledges-Britain

* Britain says G20 “not about setting national budgets”

* Draft targets economic expansion next year-FT

* G20 nations must have regulation and stimulus

(Adds plans for new G20 meeting this year in leaked draft)

By Peter Griffiths

LONDON, March 29 (Reuters) - Britain and the United States will not push G20 leaders for specific spending pledges to help fix the worst economic crisis in decades when they meet in London next week, Britain’s finance minister said on Sunday.

Alistair Darling told the BBC that countries would not be asked to reveal their public spending plans at the summit, but they should realise boosting demand will play a key role in any recovery.

“We are not saying that everybody has got to do the same thing, at the same time, on the same day,” he said. “We do need to...make sure we have a commitment for countries to act together, to do what is appropriate in their countries. By acting together in that way, the effect is so much better.”

A draft G20 communique on the Financial Times’ website on Sunday said leaders hoped support for banks, higher spending and more money for the IMF would lift the world economy out of recession by the end of 2010. [ID:nLT9752]

The 24-point draft set out action to be taken on hedge funds, bankers’ pay, tax havens, currency valuation and banks’ capital reserves. But it appeared to contain no specific numbers on further government stimulus measures to boost demand.

G20 leaders planned to meet again before the end of the year to review progress, the draft said.

It added that additional funding would be directed to emerging and developing countries that faced a threat to stability, but again specific figures were omitted.


British Foreign Secretary David Miliband played down talk of a deep rift between countries that support further stimulus, such as Britain and the United States, and those that have urged caution, including Germany and France.

“This G20 summit was never about writing national budgets. It is about the international financial architecture,” he told the BBC. “Let us not hear this (idea) that somehow the Anglo-Saxons are for fiscal policy and the other Europeans are somehow for regulation -- you have got to do both,” he said.

Leaders from the world’s 20 biggest economies meet in the British capital on Thursday to discuss how better regulation, help for international trade and extra spending could help pull the world out of the worst recession since the 1930s.

Earlier this month, a meeting of G20 finance ministers to pave the way for the London summit was dominated by reports of divisions between Washington and European countries over the balance between extra spending and tighter regulation.

A separate leaked copy of a draft G20 communique that suggested Britain was pushing for G20 nations to back $2 trillion in stimulus measures was out of date, Miliband said.

“That was actually a previous draft of the declaration,” Miliband said, adding that the $2 trillion figure has already been achieved if you add up all the global stimulus packages.

White House officials said on Saturday that U.S. President Barack Obama would stress the need for “significant stimulus” to boost the world economy, although he would not demand extra spending at once.

Australian Prime Minister Kevin Rudd said there had been “real, measurable progress” between the G20 nations on fiscal stimulus, as well dealing with toxic assets, protectionism and help for the IMF.

China’s Ambassador to London Fu Ying said China was ready to spend more to boost the economy but had limited resources.

On Saturday, oil and gas exporter Norway said it was ready to give up to 30 billion crowns ($4.56 billion) to support the International Monetary Fund (IMF), and called for the fund to play a bigger role in supervising financial markets.

The world economy shrank for the first time since 1945 in the last quarter of 2008, throwing millions of people out of work, and the IMF says 2009 will bring the first annual global contraction for more than 60 years. (Additional reporting by Keith Weir; Editing by Louise Ireland)