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G-20 leaders dine in London, across a great divide

When it comes to solving the global economic crisis, Obama and Britain's Brown are at philosophical odds with France's Sarkozy and Germany's Merkel. But host Brown predicts brandy and cigars soon.

April 02, 2009|Christi Parsons and Henry Chu

LONDON — They mingled cordially and dined on Scottish salmon, and not a single person stormed out of the dinner of world leaders at the British prime minister's home late Wednesday.

In fact, the place cards even seated President Obama next to German Chancellor Angela Merkel, who just a few hours earlier had dissed the American plan to rescue the global economy.

So it was a fitting opening to the Group of 20 economic summit that formally begins here today: Everyone was polite and civil, even as disagreement among them simmers.

French President Nicolas Sarkozy has threatened to walk out of the summit if his demands for global financial regulation aren't met. And on Wednesday, Sarkozy joined Merkel in a public statement against the idea of more government spending to spur the economy, an important feature of the U.S. plan.

The two leaders have increasingly coordinated their messages of greater financial regulation in recent days as a counterweight to a British and American call for more fiscal spending. In fact, at Wednesday's joint news conference at a London hotel, they even looked like reverse images of each other, with Sarkozy dressed in a dark suit and white shirt and Merkel in a white suit and dark blouse.

"France and Germany will speak with a single voice," Sarkozy said.

The flip side to the Merkel-Sarkozy show was the other dynamic duo of this week's summit: Obama and his host and ally, British Prime Minister Gordon Brown, who held a news conference of their own Wednesday.

Brown praised the American leadership on regulating the financial system, on recapitalizing banks and restructuring the U.S. banking system.

He said he thought that leaders were "within a few hours" of agreeing on a global plan for economic recovery and reform.

"Never before has the world come together in this way to deal with an economic crisis," Brown said. "Any of the crises that we've seen since the Second World War, you have not had this level of international cooperation. And never before have the world come together with so many countries represented from so many different continents to address this crisis."

As for Sarkozy's threat, Brown said he was sure that things would work out.

"I'm confident that President Sarkozy will not only be here for the first course of our dinner," he said, "but will still be sitting as we complete our dinner this evening."

Obama also downplayed the differences, calling them "vastly overstated."

"So I know that when you've got a bunch of heads of state talking, it's not visually that interesting," Obama said Wednesday. "You know, the communiques are written in sort of dry language, and so there's a great desire to inject some conflict and some drama into the occasion.

"But the truth of the matter is that I think there has been an extraordinary convergence," Obama said. "And I'm absolutely confident that the United States, as a peer of these other countries, will help to lead us through this very difficult time."

But analysts pointed out that the philosophical differences exposed by the financial crisis are real.

"There have long been differences between Germany, France and Britain about classic roaring Anglo-Saxon capitalism as practiced in New York and London," said Tony Travers, a professor of politics at the London School of Economics. "I suspect that the German and French governments see this as a once-and-for-all opportunity perhaps to tame the excesses of Anglo-Saxon market-driven economics . . . to reset the clock."

At their joint appearance, Sarkozy and Merkel dug in further on their view that the summit needs to produce concrete measures for international regulation of the finance sector -- not new fiscal stimulus packages.

"This has nothing to do with ego; this has nothing to do with temper tantrums," said the French leader, whom critics accuse of indulging in both. "This has to do with whether we're going to be up to the challenges ahead or not."

Sarkozy described the present moment as "a historic and unique opportunity . . . to build a new world."

"We do not want to see this opportunity pass us by," he said.

Meanwhile, Merkel pointed out that both the U.S. and Europe have put in place major stimulus packages, and argued they ought to be given a chance to work before adding more.

"The tendency is not to deal with the roots of the evil," she said. "We need to learn something from this crisis."

Travers said the chasm between Brown and Obama on the one hand and Merkel and Sarkozy on the other is informed by domestic as well as international politics.

Sarkozy, whose popularity has plummeted in France, and Merkel, who faces elections this fall, both have a need to be seen effectively representing their countries' viewpoints at the summit without necessarily playing the spoiler.

"It would be surprising if there were any grand walkouts or refusal to sign things. What you've got going on here is people balancing being seen on the international stage and the benefits that that brings, and being seen on the local, national stage back at home," Travers said.

"For domestic consumption, Mrs. Merkel and Mr. Sarkozy will without doubt be wanting to play up the G-20 summit for their domestic audiences in exactly the same way that Barack Obama and Gordon Brown want to do it for theirs. Gordon Brown has been looking for magic dust from Obama and indeed from the rest of them ever since this idea [of a London summit] came about."

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cparsons@tribune.com

henry.chu@latimes.com

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latimes.com/world

The G-20 summit

A Q&A primer on the event's political and economic issues is available online, along with more photos of President Obama and other leaders.

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