WASHINGTON — President Obama on Wednesday called for greater efforts by foreign governments to stimulate their economies in the fight against the global recession. But he also pledged an equal commitment to toughen regulation of financial institutions, a priority in Europe and elsewhere.
Elaborating on the president's comments, Treasury Secretary Timothy F. Geithner said developed nations should increase their financial commitment to the International Monetary Fund by a combined total of $500 billion to ensure that it had enough money to help poorer countries hit hard by the economic crisis.
Both the president's call and Geithner's pitch for backstopping the IMF were part of the Obama administration's effort to achieve what it hoped would be a more coordinated response to the economic meltdown worldwide.
"We can do a really good job here at home, with a whole host of policies, but if you continue to see deterioration in the global economy, that's going to set us back," Obama said.
With a meeting of financial ministers from leading economic powers set for this weekend, and Obama and other major world leaders heading to an economic summit next month, the administration is stepping up pressure on foreign governments to pour money into major stimulus plans, such as the $787-billion package the U.S. enacted last month.
But many of the Group of 20 leading and developing nations, known as the G-20, are resisting. That's partly because of widespread resentment over the U.S. role in creating the worldwide financial crisis -- and resentment over being asked to spend their money to combat it.
Also, although Americans are relatively comfortable with growing deficits, the European Union has rules against too much red ink, and many countries believe they already have done enough to stimulate their economies. Instead, they are more focused on tightening financial regulations to prevent a repeat of the crisis.
"There is this question: Do you simply say, 'Let's do the firefighting now and worry about new global rules later?' Or do you want to firefight and agree on global rules at the same time, which is more difficult," said Jakob von Weizsacker, a former World Bank economist who now is resident scholar at Bruegel, a Brussels think tank.
Obama and Geithner emphasized Wednesday that regulatory reform was a twin goal of the April 2 summit of G-20 leaders.
