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Britain's Brown seeks to take lead at G-20 summit

Other News Materials 13 November 2008 04:43 (UTC +04:00)

Gordon Brown has been one of the few leaders with a spring in his step since the world economy began to nosedive - and he'll be hoping it will carry him to success at a weekend summit on the global financial meltdown.

The British prime minister has thrown himself at the center of the financial crisis and looks to be relishing his punishing schedule of visits and late-night telephone talks aimed at pushing fellow leaders toward reforms.

He boasts of other nations matching Britain's banking sector bailout, has a plan to buck the downturn with coordinated tax cuts or spending hikes, and claims the summit in Washington will be the most important since the end of World War II.

"I want this to become the moment when we rise to the new challenges by purposeful visionary and international leadership, leaving behind the orthodoxies of yesterday," Brown told financiers at a glitzy dinner in London's financial district on Monday.

But as Brown touches down in the United States on Thursday for a meeting of the Group of 20 industrialized and emerging economies he'll likely find few takers for his five-point agenda, which seeks to stimulate the world economy and clean up the banking system.

Some opponents joke that Brown looks to have mistaken the G-20's name, thinking the acronym must translate as Gordon's 20 - such has been his desire to set the grouping's agenda.

Brown sees an opportunity to agree on far-reaching cooperation to combat the slowdown, and to reshape the world's governing bodies to give greater say to Asia and emerging economies.

His ally, French President Nicolas Sarkozy, hopes for debate on the future of currency systems and a mandate to come up with concrete, sweeping reforms in only 100 days - but most other attendees predict more modest results.

Dominique Strauss-Khan, the head of the International Monetary Fund, has warned that expectations for the summit have likely been raised too high.

Many observers claim that without U.S. President-elect Barack Obama, decisions taken in Washington could count for little - with the prospect that Obama could present his own alternative measures come January.

It's a message Brown has chosen to ignore.

Brown's agenda includes coordination on fiscal stimulus packages, a cleanup of the banking system, a beefed up surveillance role for the IMF, demands for banks to pass on interest rate cuts to customers and a new push for a world trade deal.

He's likely already won assurances from the Persian Gulf region to help fund a vast increase of the IMF's $250 billion bailout pot for struggling economies and will pressure China to follow suit.

Brown also seeks a new network of global regulators who would scrutinize the world's largest financial institutions.

The British leader even claimed Tuesday that an agreement on the long-stalled Doha round of world trade talks could be reached within days - despite simmering divisions between the West and emerging economies over access to markets.

Others are more circumspect about the meeting's prospects.

"We still do not have the perfect diagnosis of the causes of the crisis and don't expect much from this G-20 meeting," Brazil's president, Luiz Inacio Lula da Silva, said Tuesday after talks in Rome.

Germany says decisions on long-term action will take months.

But Sarkozy has pressed for a quick deal on an overhaul of the financial system, saying there is "no time to lose."

He takes credit for pressing U.S. President George W. Bush to convene the summit, and may seek to push his own plan for a clamp down on tax havens - a measure that would put him at odds with Brown.

The two Europeans have taken on a global leadership role almost by default, said Howard Wheeldon, an analyst at London consulting firm BGC Partners - and because they're seeking to burnish their images at home.

"It's political, political, political," said Wheeldon. "Both Britain and France have set expectations far too high for the conference. They seem to see the G-20 meeting as a chance to show leadership to their domestic audiences."

Brown claims the Washington meeting should be a successor to Bretton Woods, the 1944 conference in New Hampshire which established international monetary protocols governing trade, banking and other financial relations among nations.

While some have scoffed at Brown's ambition, Will Hutton, a columnist and director of London-based think tank The Work Foundation, said others may consider the Brown-Sarkozy agenda too meek.

Britain has likely already secured agreement on modest increases to the IMF bailout pot, loosely coordinated fiscal action, new regulation of derivatives and a promise of future action on transparency, he said.

"This falls a long way short," Hutton said. He said the leaders should consider a system of managing exchange rates between the euro, U.S. dollar and yen, to boost stability.

Negotiations following Bretton Woods took two years - some predict modern-day talks could drag on even longer.

"What Brown is talking about is what they are only going to begin discussing - it'll be a long, long sequence of events. Global regulation, for instance, is something that'll take 10 years," Wheeldon said.

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