France is threatening G20 walkout

[frigidmagi]

BBC

France will walk away from this week's G20 summit if its demands for stricter financial regulation are not met, the finance minister has told the BBC.

Christine Lagarde told Hardtalk that President Nicolas Sarkozy would not sign any agreement if he felt "the deliverables are not there".

Strengthening financial regulation will be one of the key issues at the G20.

France wants a stronger global financial regulator than the US and the UK would like.

If France were to leave the summit, it would be a blow to both UK Prime Minister Gordon Brown and US President Barack Obama.

Both men have spoken of their high hopes for the meeting to stimulate international recovery.

"Leaders meeting in London must supply the oxygen of confidence to today's global economy and give people in all of our countries renewed hope for the future," Mr Brown said.

President Obama is due to arrive in London for the summit later. It will be his first visit to Europe since he became president.

'Moral boundaries'

The prime minister also called for the "values that we celebrate in everyday life" to be brought to the financial markets.


G20 LONDON SUMMIT
World leaders will meet later this week in London to discuss measures to tackle the downturn. See our in-depth guide to the G20 summit.
The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US and the EU.

"I believe that unsupervised globalisation of our financial markets did not only cross national boundaries, it crossed moral boundaries too," Mr Brown said.

He was speaking at a gathering of religious leaders in St Paul's Cathedral with the Australian Prime Minister Kevin Rudd.

Mr Rudd warned that the global economic crisis was having a devastating effect on developing countries.

"This is the unseen cost of the crisis, the invisible face of the global recession," he said.

"But in conscience and for people of conscience we cannot stand idly by."

Cracks emerging?

However, splits among other world leaders on how to tackle the economic crisis have also begun to emerge in other areas.

European countries, in particular, are resisting calls to commit to spending more this year and next.

President Sarkozy has previously spoken out against "Anglo-Saxon" economies, as has the prime minister of Luxembourg, Jean-Claude Juncker.

"This crisis started in the United States. The Anglo-Saxon world has always refused to add the dose of regulation which financial markets, the international financial system needed," Mr Juncker said last week.

The European Commission President, Jose Manuel Barroso, denied that there were any splits within the EU itself.

"In the last European summit we have agreed on a common position, a very ambitious position," he told the BBC.

"I will be happy if I see all our partners with the same level of ambition."

'Absolutely determined'

However, there have also been expressions of optimism.

German Chancellor Angela Merkel is reported to have said that chances were high that agreements - for example, to regulate hedge funds - would be reached.

And in spite of her walkout threat, Ms Lagarde was eager to stress that the G20 leaders agree on a range of important issues.

"I am absolutely determined, and President Sarkozy has said it loud and clear, that we actually eradicate non-cooperative centres and tax havens," she said.

"I know that Chancellor Merkel is very much on that line, I know that Gordon Brown has said that old tax havens have nothing to do with this new world.

"Well, we need to deliver on that and we need to be extremely united and strong."

GIVE ME WHAT I WANT OR I'M WALKING! Yep. Grownups are not running the show.

[Destructionator XV]

Demanding regulation seems completely sane. Why should we keep throwing money into the black hole of this financial system without taking steps to fix the fundamental problem? I'm with France here.

[frigidmagi]

Expect walking out gets nothing done and tax havens and "none cooperative centers" are not the issue. In fact what he's asking for is for the G20 to get together to bully sovereign states that have tax codes like the Cayman islands.

Not only does that have little to do with the crisis (hedge funds, yeah they do, but most everyone has already agreed they need to be regulated) but this is bluntly a threat and it's the same kind of threat everyone condemns when the US does it or Russia, or China for that matter. I'm not giving France a free pass. If it's bad for one country to do it, it's bad for another.

[SirNitram]

Naturally, Obama defused Sarkozy's little tantrum with poise, grace, and pulling him over to a corner.

[General Havoc]

Honestly, I'm astonished at how well Obama managed the entire meeting.

[Jason_Firewalker]

I am extremely proud of President Obama and really pleased with how well he is working through things as president.