French President Nicolas Sarkozy and German Chancellor Angela Merkel announced after talks in Berlin that they had agreed on sanctioning tax havens and called for an April 2 G20 meeting to focus on creating tighter fiscal regulations.
Reuters - The leaders of France and Germany rejected on Thursday U.S. demands that they spend more to help break a global recession and said a G20 meeting in London should focus on agreeing tighter regulations.
In a joint statement, the two countries called for hedge funds to be regulated, a sanctions mechanism to be drawn up to target tax havens, and said they would work towards more transparent rules on remuneration.
The world's economic powers are under pressure to deliver on pledges made at a November G20 summit in Washington, where they unveiled the action plan for combating the global financial crisis and guarding against future meltdowns.
"The point is to implement the action plan from Washington," German Chancellor Angela Merkel told a joint news conference in Berlin with French President Nicolas Sarkozy.
"That means: regulation, introducing transparency on to the financial markets, strengthening multilateral institutions," she said.
Stimulus programmes were important but could not substitute for the necessary regulation, she said.
The G20 summit next month is shaping up as a showdown between the United States, which wants fellow members of the club to spend more, and European nations which want to rein in the unbridled capitalism they blame for the current crisis.
"We consider that in Europe we have already invested a lot for the recovery, and that the problem is not about spending more, but putting in place a system of regulation so that the economic and financial catastrophe that the world is seeing does not reproduce itself," Sarkozy said.
Merkel, standing alongside Sarkozy, said Germany and France were united in their conviction that the April 2 G20 meeting in London needed to follow through on pledges made at a European summit in Berlin last month.
At that meeting, European countries said they would press for tighter regulation of hedge funds, a crackdown on tax havens and an increase in funds for the International Monetary Fund (IMF) to help countries hit by the crisis.
The French and German leaders said: "(France and Germany) underline today that all hedge funds and private pools of capital that could constitute a systemic risk, should be subject to appropriate regulation and supervision."
U.S. Treasury Secretary Timothy Geithner said on Wednesday he wanted the G20 to put in place a "substantial, sustained commitment to stimulus" to help lay the foundations of a global economic recovery.
British finance secretary Alistair Darling sounded the same note, saying the two saw "eye-to-eye" on spending policy.
But Merkel said on Thursday she assumed Britain was not at odds with its European partners on the issue.
"Gordon Brown was in Berlin, so I am very optimistic that the European position is unchanged from the Berlin meeting," she said.
Asked whether Europe was united on the matter she added: "That is the reason we spoke with one voice here today."
In their statement, France and Germany also promised to refrain from protectionist measures and push for a strong signal from the G20 on aiming for a breakthrough in the Doha round of trade talks in the coming months.
Date created : 2009-03-12