G20 nations divided over economy

Angela Merkel, the German chancellor, said she was hopeful that a remedy would be found despite the differences.

“I’m very positive, I’m very optimistic that we will be able to … come to an agreement together with the United States, with emerging economies such as China and India,” she said after meeting Gordon Brown, the British prime minister, in London.

“We have to come up with substantive results.”

Reshaping regulation

Brown said that the April summit would seek agreement on reshaping the international regulatory system.

“It’s going to include tax and regulatory havens where it didn’t before. The scope of action is defined by what a company or an institution does, not what it says it does,” he said.

“Regulation in one country must co-operate more closely with regulation in another.

“We must bring the shadow banking systems, and this includes hedge funds, into the regulatory system.”

The ministers from the United States, Japan and China, plus wealthy European nations and emerging powers such as South Korea, are holding talks in Horsham, about 50km southwest of the capital.

Considerable differences

Jean-Claude Juncker, the chairman of Eurozone finance ministers, said before the meeting that US calls for more cash to be injected into the world economy “do not suit us”.

Japan and China joined the debate on Friday, saying that government spending should be the top priority.

Failure to come up with a clear policy commitment could further hit already volatile stock markets.

Al Jazeera’s Tim Friend, reporting from Horsham, said: “I think everyone here would at least describe themselves as optimistic, whether that’s well-founded or not is another matter.

“There remains a considerable point of difference between Washington and Europe about exactly how and what the tactics should be towards getting the economy back on track.”

The ministers were also expected to discuss trade protectionism and funding for the International Monetary Fund (IMF) to bail out struggling countries.

Officials from the emerging powers of Brazil, Russia, India and China said on Saturday that protectionism was “an increasingly real threat” and that not enough funds were available to help troubled nations.

“IMF resources are clearly inadequate and should be very significantly increased,” they said in a statement.

“We deem it necessary to develop new credit facilities that could assist countries facing financial problems.”

IMF influence

Sources at the meeting suggested that G20 nations were preparing to boost IMF resources when the final communique is published. 

Samah el-Shahat, Al Jazeera’s economic analyst, said that India and China needed to have a greater say in international institutions such as the IMF.

“It could be the only way they can protect their own industries,” she said.

“America and Europe have long resisted giving any of these countries greater say or greater quotas.”