LONDON (Reuters) - U.S. President Barack Obama said on Wednesday there was “enormous consensus” between the largest developed and emerging economies on plans to haul the world out of the deepest downturn since the 1930s.
Obama played down any differences with France and Germany, which insist that the summit of G20 countries agrees on measures to tighten financial regulation and crack down on tax havens rather than simply renewing their promises to do so.
Demonstrators clashed with riot police and smashed bank windows in London’s financial center in protest against a system they said had robbed the poor to benefit the rich.
Hundreds of protesters converged on a branch of the Royal Bank of Scotland, shattering windows. Rescued by the government in October, RBS has become a lightning rod for public anger over banker excess blamed for the crisis.
Obama, making his first official visit to Europe, said G20 nations at Thursday’s summit were not going to agree on every point but pushed aside suggestions the summit would falter because countries were split over the importance of regulation versus new stimulus packages.
“The core notion that government has to take some steps to deal with a contracting global market place and that we should be promoting growth — that’s not in dispute,” Obama said at a news conference with British Prime Minister Gordon Brown.
“On the regulatory side, this notion that somehow there are those who are pushing for regulation and those who are resisting regulation is belied by the facts.”
The stakes are high, with the world economy set to shrink this year for the first time since World War Two and tens of millions of people losing their jobs.
People will die in the world’s poorest countries if rich nations push them aside in the scramble to escape the global economic crisis, Egypt’s finance minister said.
World stocks built on a recent recovery, but worries over banks and growth continued to haunt markets in Europe and analysts said many investors remained on the sidelines, edgy over what message the summit would generate.
French President Nicolas Sarkozy earlier threatened to disassociate himself from any “false compromises” at Thursday’s summit in London, the second such meeting of world leaders to try to tackle the problems created by the credit crunch.
German Chancellor Angela Merkel supported Sarkozy’s stance and said she would make sure concrete decisions were taken.
But many analysts said both were posturing largely for their own voters and staking out their positions ahead of the meeting.
Sarkozy’s office said both Brown and the French president had reaffirmed their support for more financial regulation in a telephone call.
World leaders gathering in London will meet Queen Elizabeth at Buckingham Palace before holding a working dinner in Downing Street cooked by celebrity chef Jamie Oliver.
Summit host Brown saw likely agreement on issues including a possible $100 billion boost for global trade, financial regulation, and support for economic growth and job creation.
G20 leaders are also expected to more than double the $250 billion available to the International Monetary Fund to help emerging market countries pushed to the brink.
“We are within a few hours, I think, of agreeing a global plan for economic recovery and reform and I think the significance of this is that we are looking at every aspect,” Brown said.
Sarkozy earlier did not explicitly repeat a threat to walk out of the gathering but voiced pessimism.
“I will not associate myself with a summit that would end with a communique made of false compromises that would not tackle the issues that concern us,” he told Europe 1 radio in an interview. “As of today, there is no firm agreement in place.”
In a further sign of division, Japan criticized the German approach. Japanese Prime Minister Taro Aso was quoted as saying that Germany did not understand the importance of fiscal stimulus.
Sarkozy and Merkel are pushing hard for visible results on regulation, such as closer tabs on hedge funds and credit rating agencies, and naming and shaming of tax havens if they fail to bow to pressure and end bank secrecy.
Writing by Keith Weir, editing by Mark Trevelyan