US split deepens before G20 finance talks

World finance chiefs prepared for a ministerial meeting of the G20 leading economies near London on Saturday that threatens to expose deep divisions over how to halt the raging economic crisis.
Just three weeks before a gathering of heads of state from the Group of 20, discord seems to outweigh lip service to coordination and a German-French drive to focus on cross-border rules for finance is further souring the air.
"We have agreed that Germany and France will send a common signal at this summit" on April 2, German Chancellor Angela Merkel said at a joint press conference with French President Nicolas Sarkozy in Berlin.
"The issue is not spending even more but to put in place a regulatory system to prevent the economic catastrophe that the world is experiencing from being repeated," Merkel said in a direct rebuttal to US calls for more spending.
There must be "regulation and transparency of financial markets," she said.
US President Barack Obama, who enacted a 787-billion-dollar stimulus bill last month, tried to bridge the gap on Wednesday, calling for a two-pronged G20 effort to fix the global economy: stimulus measures and regulatory reforms.
But after a meeting of eurozone finance ministers this week, their chairman Prime Minister Jean-Claude Juncker of Luxembourg rejected the US calls for more pump-priming by other G20 economies, declaring such proposals "do not suit us."
Juncker after conferring with Czech officials in Prague on Thursday again voiced opposition to any additional spending plan to combat the crisis.
"The European recovery programme represents a spending level of 3.4 to 4.0 percent of GDP," he said.

"Our public finances are beginning to suffer and we must take account of the effects these programmes will have in 2009 and 2010 before we undertake additional spending."
The US stimulus is substantially more than the 400 billion euros engaged by 27 EU countries. The two total economies are of comparable size, but the EU has not forged an integrated response.
US Treasury Secretary Timothy Geithner has also called for the International Monetary Fund's "New Arrangements to Borrow" credit programme to be boosted to 500 billion dollars -- far more than proposed by the Europeans.
For the whole of 2009, Britain is chairing meetings of the G20 -- a grouping of 19 developed and developing countries plus the European Union that includes China, Germany, Japan, Mexico, Turkey and the United States.