PITTSBURGH — Leaders of the world’s major economies began gathering today for a two-day “checkup” summit aimed at making sure a fledgling global recovery remains on track while laying down tougher rules for global financial institutions.
The heads of the Group of 20 nations were meeting to review strategy for the third time since the worst global recession since the Great Depression struck with force a year ago.
The situation is not as dire as at the previous meetings last November in Washington and last April in London. But the global recovery remains fragile, with many big financial institutions still under strain.
British Prime Minister Gordon Brown said he would push to have the G-20 replace the Group of Eight economic summit as the board of directors for the global economy. The G-8 includes the United States and all the other traditional economic powers, while the G-20 also covers major emerging markets such as China, Brazil and India.
“The G-20 should be the forum of international cooperation,” Brown told reporters today. “Over time, the G-20 has to take a bigger role than the G-8 has done in the past.”
Brown said he hoped the G-20 would agree on a new compact on jobs and growth, an idea that is being pushed by President Barack Obama.
Obama, who termed the Pittsburgh meeting a “five-month checkup” since the April meeting in London, wants the group to agree to a framework that will promote more balanced growth.
He also wants the G-20 countries to set in motion a program to toughen standards for bank capital, the reserve cushion against losses that proved decidedly inadequate in preventing the financial crisis that struck with force a year ago.
The two-day summit, to end with a joint communique and closing news conferences on Friday, was to open with a working dinner today night.
Many of the streets in downtown Pittsburgh were deserted after police and national guard troops erected a heavy security perimeter around the David Lawrence Convention Center where the talks were being held.
In pushing for a “framework for sustainable and balanced growth,” Obama will tell world leaders that the global economy cannot continually rely on huge borrowing and spending by Americans and massive exports by countries such as China.
Obama gave a hint of the message when he spoke at the United Nations in New York on Wednesday. He said other nations cannot “stand by and wait for America to solve the world’s problems alone. Now is the time for all of us to take our share of responsibility for a global response to global challenges.”
When the G-20 met in April, the economies of the United States and many other countries were under severe strain, and world leaders largely agreed on common remedies such as dramatically increased government spending to provide some stimulus.
Now, with the crisis seemingly averted, the leaders will meet in a calmer atmosphere to discuss how best to keep reinvigorating their economies without repeating earlier mistakes.
“This is not a trillion-dollar summit,” said Mike Froman, a top economic adviser to Obama, referring to the total pledged in London to support crisis efforts of global lending agencies such as the International Monetary Fund.
He told reporters the administration hopes world leaders will agree “on a framework for balanced and sustainable growth, a set of policies, parameters and process” that can “avoid the sort of imbalances that contributed to this crisis.”
U.S. officials expect no binding, treaty-like language. But Froman said they hope for some type of process “for holding each other accountable, reviewing each other’s actions in much the same way that the G-7 has done in the past in terms of focusing on each other’s economic policy frameworks.”
Obama plans no one-on-one meetings with world leaders or extensive discussions of Iran, White House officials said late Wednesday. The G-20 is likely to have less pizazz than did Obama’s visit to the United Nations this week.
Still, it will let him play host to an array of world leaders and their spouses and try to nudge them closer to his thinking on climate control, banking regulations and other matters.
Obama and his wife, Michelle, will greet their guests at an opening receptitoday at Pittsburgh’s Phipps Conservatory and Botanical Gardens.
The president has signaled plans to call for an end to extensive government subsidies that encourage the use of fossil fuels, such as oil, coal and natural gas, which are believed to contribute to global warming. He will propose a gradual elimination, White House officials said.
Fast-growing industrial nations such as China and India are likely to resist the idea.
G-20 leaders also will discuss limits on bankers’ pay in hopes of discouraging risky ventures. And the United States will support greater influence in the International Monetary Fund by emerging economies such as China, India and Brazil. Some European governments complain that the move would come at their expense.
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