Obama sets off on European trip

US President Barack Obama has set off from Washington DC for Europe on his first major foreign trip since taking office in January. Mr Obama’s first stop is London where he is due to attend the G20 summit. He will also join leaders at a Nato summit on the French-German border and visit the Czech Republic and Turkey. Mr Obama’s mission during his tour will be to restore the US’s place at the head of the diplomatic table, says BBC North America editor Justin Webb.

He will do so by asserting that the US has changed – that America is willing to listen and engage, but he will also insist that America still has the capacity to pull the world in the right direction, our correspondent says.

A White House spokesman stressed the president would “listen in London as well as lead”.

‘Everyday values’

The host of the G20 meeting, UK Prime Minister Gordon Brown, is keen for world leaders to reach agreement on a new set of rules for regulating global finance as well as measures to boost economic demand and support poorer countries.

According to UK officials, Mr Brown spoke to the president on the phone during his flight to “identify outstanding remaining issues” ahead of the gathering of world leaders.

The call was an “opportunity for both of them to take stock of where we were,” a No 10 spokesman said.

Speaking earlier at a gathering of religious leaders at St Paul’s Cathedral, Mr Brown called for the “values that we celebrate in everyday life” to be brought to the financial markets.

“I believe that unsupervised globalisation of our financial markets did not only cross national boundaries, it crossed moral boundaries too,” Mr Brown said.

But with two days to go before the London summit, further splits are emerging on how to tackle the economic crisis.

The French Finance Minister, Christine Lagarde, told the BBC that France would walk away from any agreement if the US and the UK were not prepared to accept a stronger financial regulator.

G20 countries are also divided over the size of their respective stimulus packages.

Some US commentators have called on European governments to increase the size of their stimulus efforts.

In response, some European leaders have argued that the economic crisis began in the US, and that America’s stimulus package should therefore be more robust than other nations’.

“This crisis started in the United States,” said Luxembourg’s Prime Minister Jean-Claude Juncker last week.

“The Anglo-Saxon world has always refused to add the dose of regulation which financial markets, the international financial system needed,” he added.

There are signs of agreement on other issues, however.

German Chancellor Angela Merkel is reported to have said that chances were high that deals – for example, to regulate hedge funds – would be reached.

Town hall meeting

While he is in London, Mr Obama will hold extensive talks with Gordon Brown, meet the UK opposition leader David Cameron and have a private gathering with the Queen.

The president is also scheduled to hold bi-lateral meetings with Russian President Dmitry Medvedev, Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh, South Korean President Lee Myung-bak and King Abdullah of Saudi Arabia.

On Friday, Mr Obama will travel to Strasbourg, France, where he will hold talks with French President Nicholas Sarkozy, and stage a “town hall”-style meeting, before heading over the border to Baden-Baden in Germany for a meeting with Ms Merkel.

He will also attend the Nato summit on Saturday in Strasbourg, where talks are expected to focus on the ongoing military operations in Afghanistan.

Mr Obama will then head off to the Czech Republic to attend the EU-US summit, before travelling on to the Turkish capital, Ankara.

It will be Mr Obama’s first trip to an Islamic country since he entered the White House.

Source: BBC BEWS

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Q&A: The G20 summit

World leaders are meeting in London on 2 April at the G20 summit to discuss plans to tackle the current economic crisis. We explain why the meeting has been called and what it hopes to accomplish.

What is the G20?

The G20 is a group of the world’s most powerful countries that together represent 85% of the world’s economy. It includes both major industrial powers such as the US and Germany, and emerging economic powers such as Brazil and China.

The UK government, which holds the rotating presidency of the G20, is organising the London summit to tackle the growing economic crisis with coordinated action.

It follows the first G20 meeting of heads of government which took place last November in Washington.

The G20 was originally set up after the Asian financial crisis in 1999 to discuss international co-operation among finance ministers and central bankers.

What are the aims of the London summit?

Gordon Brown believes that the aim of the London summit is no less than the redesign of the world financial system to respond to the downturn.

There are three main aims of the summit.

First, co-ordinated action to revive the world economy, both by more interest rate cuts and more spending by governments to bring countries out of recession.

Secondly, there will be efforts to prevent a future crisis by strengthening the international regulation of banks and other financial institutions.

Thirdly, leaders are hoping to agree a blueprint for future reform of the world financial system, including changes to the international organisations charged with regulating the world economy, such as the International Monetary Fund (IMF), to give a greater voice to poorer countries, and more resources.

Overall, it is hoped that the summit will prevent a slide towards protectionism by giving countries hope that working together could be a more effective way of dealing with the downturn.

What are the main obstacles to any deal?

Expectations of a comprehensive deal have been downplayed in recent days.

The most controversial issue is how far governments are prepared to go to agree further public spending to boost growth.

European countries, in particular, are resisting the calls from the US to promise to spend more not only this year but in 2010.

Restructuring the international financial institutions is also likely to be controversial, as giving more power to emerging market countries such as China and Brazil would mean taking away power and influence from European countries in the IMF and World Bank.

And there is yet to be agreement on how much more money should flow to poor countries who have been hard-hit by the downturn.

And although countries will say they are against protectionism in general, policing that agreement could be problematic.

What is likely to happen?

The summit is likely to produce a broad agreement on the need for coordinated action, but no concrete blueprint for future action.

With many countries already launching global stimulus plans, it may be relatively easy to agree to support such measures in principle.

The summit will agree a blueprint for the reform of the financial system that will put in place stronger global regulation – but that will take several years to implement.

And it is likely to endorse changed to the international financial institutions like the IMF, giving them more money and giving more voting rights for emerging countries like China.

There are unlikely to be any concrete measures to curb the fluctuations in exchange rates, which have hit many developing countries hard, although they may be pledges to maintain the flow of aid.

And there will be a general endorsement of the need to avoid protectionism, but it is unlikely to be enough to restart the world trade talks that have been stalled for the last year.

Full membership of the G20: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU.

Source: http://news.bbc.co.uk/2/hi/business/7921385.stm

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