Hammer the bankers or I'll wreck G20 pact – Sarkozy

Published on Wednesday 1 April 2009 22:10

FRANCE and Germany warned last night they would not sign up to an agreement at today's G20 summit unless there was tough action to regulate the global financial markets.

World leaders will today seek to bury their differences and use the summit to find a common solution to the credit crunch – and try to prevent a repeat.

But the task facing them was laid bare when the two European nations outlined a series of differences between them and Britain and the United States.

It came after a day of intense talks in London, with Gordon Brown, the Prime Minister, meeting Barack Obama, the US president, as well as the leaders of France, India, Russia, China and Japan, in an attempt to reach a consensus.

At a joint press conference in a hotel, Nicolas Sarkozy, the French president, and Angela Merkel, the German chancellor, made it clear they were not satisfied with proposals on the table for today's gathering.

"Germany and France will speak with one and the same voice," Mr Sarkozy said. "These are our red lines."

And, as if enforcing the point, the French president was last to turn up for dinner with G20 leaders at Downing Street – an apparent snub to Mr Brown, who had laughed off Mr Sarkozy's threat to walk out of the summit by joking: "I'm confident President Sarkozy will not only be here for the first course at our dinner, but still be sitting as we complete our dinner."

At their press conference, Mr Sarkozy and Ms Merkel left no doubt they would refuse to sign an agreement that crossed those "red lines" on tax havens, hedge fund regulation, banking transparency and a worldwide cap on bankers' pay.

Mr Sarkozy said: "We are aiming for the same objectives in terms of principles and how we apply those principles. The objective is a simple one – we demand results, we want hard and fast results.

"This is a historic opportunity afforded us to give capitalism a conscience, because capitalism has lost its conscience and we have to seize this opportunity."

Mr Brown's spokesman played down suggestions of a rift, but he admitted – as world leaders continued to shuttle in and out of No10 – that agreement had not yet been reached.

He said: "We are making good progress, but we are not there yet. We are hoping for a successful conclusion to the summit tomorrow."

Despite the flurry of talks, it was the appearance of Mr Obama and his wife, Michelle, that took centre stage – from a breakfast meeting at No 10 through to a Buckingham Palace reception with the Queen and finally a return to Downing Street for a dinner cooked by celebrity chef Jamie Oliver.

Mr Obama was unwilling to accept the Prime Minister's repeated assertion that the credit crunch was born in the US before spreading to Britain.

He admitted the US had played its part in the banking collapse but said there had also been problems in Britain and Europe. Mr Obama said: "The United States certainly has some accounting to do with respect of a regulatory system that was inadequate to the massive changes that had taken place in the global financial system.

"What is also true is that here in Britain, in continental Europe and around the world, we were seeing the same mismatch between regulatory regimes that were in place and the highly interdependent global capital markets that emerged."

He went on: "At this point, I'm less interested in identifying blame than fixing the problem. I think we have taken some very aggressive steps in the United States to do so… I think there is enormous consensus that has emerged in terms of what we need to do now."

He said the US was not prepared to act alone in delivering further boosts to its economy, saying: "It can't just be the US as the engine. Everybody is going to have to pick up the pace."

Mr Obama encouraged consumers to "take heart" from the belief that governments had learned lessons from previous recessions and were taking decisive action.

"Despite the current hardships, we are going to get through this," he said. "I would ask people to be confident about their own future and, maybe in some cases, to be spending now as an investment for the future. Don't short-change the future because of fear of the present."

Both Mr Brown and Mr Obama sought to play down the reports of rifts among the G20 leaders, with the US president saying any differences had been "vastly overstated".

He said he had come to London "to listen, not to lecture", and added: "We won't solve all our problems in the next few days, but we can make real and unprecedented progress."

My husband and iPod – Queen's gift from Obama and First Lady

THE leader of the Free World was swept into a lock-down London yesterday in the grip of a high-octane mix of security and celebrity.

As rioters denounced American-fuelled capitalism, the 44th president of the United States insisted his favourite thing about Britain was "the people".

Barack Obama referred to Mr Brown as "Gordon" and spoke about the "special relationship" several times. The president made clear his affection for the UK and the Prime Minister, whom he said was a man of integrity.

"The thing I love about Great Britain is its people. There is just an extraordinary affinity and kinship," he said.

Mr Brown thanked Mr Obama profusely for visiting, no doubt hoping some of the president's stardust would be scattered on his own fortunes.

And it appeared even royalty was not immune to the Obamas' star status as they met the Queen and Duke of Edinburgh at Buckingham Palace. Noting they only arrived in the UK on Tuesday night, the Queen said: "It's an awful time lag, isn't it?"

Describing his day so far, Mr Obama said: "I had breakfast with the Prime Minister, I had meetings with the Chinese, the Russians and David Cameron."

And appearing to refer to his jet lag, he won laughter from his hosts as he added: "I'm proud to say I did not nod off."

Prince Philip then appeared to add one of his trademark gaffes to the proceedings, by asking the president of his meetings with the various politicians: "Can you tell the difference between them?"

A Palace spokesman said the Obamas presented the Queen with a personalised iPod containing a video of her visit to Virginia, Washington, in 2007. In return, the royal couple gave them a silver-framed, signed photograph of themselves.

The two couples joked together and later the Queen and the First Lady acted like old friends following a photocall with the other G20 leaders, which the Queen said "had to be a happy photo".

The Queen and Mrs Obama took the unusual step of putting their arms around each other.

Meanwhile, Downing Street staff had been working hard to ensure the programme ran smoothly. Last night, the G20 leaders sat down to a working dinner prepared by Jamie Oliver in No 10.

At a separate dinner for spouses – next door in the State Room at No 11 – Mrs Obama sat between Harry Potter author JK Rowling and Olympic gold medallist Dame Kelly Holmes.

Tonight, Sarah Brown will take the spouses on a cultural trip to the Royal Opera House.

GERRI PEEV

Focus moves to Docklands centre

THE G20 action will move today to the ExCeL centre in east London, where world leaders will gather to grapple with the globe's problems.

Campaigners behind the "G20 Meltdown" group have promised to arrive early outside the centre in the Docklands, where they have threatened to "wake up" visiting dignitaries in their hotel rooms with a cacophony of noise.

Leaders will gather at the centre from 7am. The security operations so far have included shutting the Docklands Light Rail way stations on either side of the centre. Tomorrow, protests could move back to the Royal Bank of Scotland, where the beleaguered institution holds its annual general meeting.

Campaigners from the People & Planet group have organised a demonstration outside RBS's Edinburgh and London headquarters.

The group is protesting against the bank's investment in oil companies and other polluting firms.

"We'll be telling RBS-NatWest: we've cleaned up your finances, now stop messing up our climate," it says on its website.

Tensions last night have led to heightened security fears ahead of today's meeting.

An anti-poverty group expressed "outrage" after its accreditation to attend the summit was suddenly withdrawn yesterday.

The World Development Movement said it had no idea why the decision was taken, but claimed it was on the orders of 10 Downing Street.

Benedict Southworth, the director, said: "I am outraged we have apparently been banned at the last minute from attending the summit."

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