BERLIN (Reuters) - German Chancellor Angela Merkel urged Group of 20 leaders on Thursday to agree concrete new regulations for financial markets at a summit this week and not let themselves be sidetracked by other economic themes.
Speaking days before Germany holds a federal election and shortly before her departure for a two-day G20 summit in Pittsburgh that begins later on Thursday, Merkel said the world’s leading countries were making progress on financial reform but warned the momentum could fade.
“We have to make sure we learn the lessons of the crisis and make sure it is not repeated. Pittsburgh will be decisive in determining whether the subject of financial market regulation continues to be a central issue. For us, it is the most important subject at the meeting,” Merkel told reporters.
“My view is that we are on a good path but the impetus could fade at any time and we will push hard to try to make sure this doesn’t happen.”
“Politicians must have the courage to do things which are not immediately applauded by banks worldwide,” said Merkel.
Speaking alongside Finance Minister Peer Steinbrueck, a member of the rival Social Democrats (SPD) who are campaigning against Merkel in the election, Merkel said she was open to U.S. demands that the G20 discuss global imbalances.
But she said this discussion could not be allowed to hinder plans to introduce tighter regulations of financial markets and rejected suggestions that Germany needed to overhaul its export-dependent economy and spend more.
“I have made clear we should not look for other topics and forget about financial market regulation,” Merkel said. “Imbalances are an issue, we must have imbalances and all the possible causes on the agenda. Exchange rates belong to that.”
Steinbrueck put the onus on other countries to address imbalances, saying any discussion must include issues like a soaring U.S. budget deficit and the Chinese currency.
Merkel said the G20 would also talk about an upcoming climate change summit in Copenhagen in December, saying preparations for that meeting were not satisfactory.
“I want to emphasize that I am not satisfied with the status of preparations for Copenhagen,” she said, noting some progress from China and Japan at a United Nations meeting.
“You cannot be happy when you think what still has to be done for Copenhagen but Germany and Europe are well prepared (on this topic) for the Pittsburgh summit.”
Writing by Noah Barkin; reporting by Dave Graham and Madeline Chambers; Editing by Andy Bruce