April 2: London: G 20 Meeting Update: Obama

Obama Says ‘Concerted’ G-20 Action Needed on Economy (Update2)

SOURCE

By Roger Runningen

March 11 (Bloomberg) -- President Barack Obama said after a meeting with Treasury Secretary Timothy Geithner that the U.S. and other Group of 20 nations must seek agreement on a coordinated response to the global economic crisis.

“A strong U.S. economy will help their economy, so they’re rooting for our success,” Obama told reporters at the White House, citing his talks with world leaders including Prime Minister Gordon Brown of Britain last week. “We’ve got to make sure we’re rooting for theirs as well.”

Obama said he’s “optimistic” that a common approach can be found, even though European Union governments have rebuffed U.S. calls to take more fiscal stimulus measures.

Geithner leaves the U.S. tomorrow for a meeting of finance ministers from the world’s developed and developing nations to lay the groundwork for a summit of government leaders on April 2 in London. The agenda includes financial regulation, boosting the resources of the International Monetary Fund and how to revive growth worldwide.

Geithner told reporters that G20 leaders have to “bring together a new consensus” on fixing the global economy. “Everything we do in the United States will be more effective if we have the world with us.”

Obama said the U.S. has two goals for the summit in London. One is to ensure there’s “concerted action around the globe to jump-start the economy.” Second, he said, is to “make sure we are moving forward on a regulatory reform agenda” to ensure that these kinds of crises don’t happen again.

European Union Reaction

European Union finance ministers have rejected calls from the U.S. to pump more money into their economies to battle the global recession. Obama last month signed into law a $787 billion package of tax cuts and new spending to spur U.S. economic growth.

Obama said that while there remain differences over what actions are needed, “you’re starting to see a lot of coordination at various levels.”

The U.S. won’t be able to revive growth in isolation, he said. “If we continue to see deterioration in the world economy, that’s going to set us back,” Obama said.

For example, U.S. exports had been a bright spot in the American economic picture until recently, he said, and “that has now gone away” as other economies have contracted and credit remains locked up.

Fiscal Stimulus

The International Monetary Fund said in a report last week that only the U.S., Saudi Arabia, China, Spain and Australia are moving toward meeting the IMF’s target of introducing fiscal stimulus equivalent to 2 percent of gross domestic product this year. Germany’s efforts currently amount to 1.5 percent of GDP, which is double what France has passed, according to the IMF.

Obama said he is consulting with U.S. lawmakers on a “regulatory framework,” building upon Federal Reserve Chairman Ben S. Bernanke’s recommendations yesterday.

“That’s not just something we want to do domestically, but we ought to make sure we are coordinating with other G-20 countries,” the president said.

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net