HUNTSVILLE, Ontario — As world leaders gathered to deal with the aftermath of the global financial crisis, President Barack Obama boasted about a congressional compromise on overhauling the U.S. banking system and called for an international effort to prevent future economic meltdowns.
But Obama was still facing obstacles in convincing Congress to provide more money to fight unemployment and many countries were resisting Obama’s appeals for continued stimulus spending to support the global economy. They were moving in the opposite direction to raise taxes and cut governmentprograms out of fears of a Greek-style debt crisis.
After meeting through the night in Washington, congressional negotiators cleared the financial-overhaul proposal with the help of an administration-brokered compromise on derivatives trading.
The agreement was certain to be a major discussion point as Obama and other leaders of the Group of 20 major economies gathered for three days of talks in Canada. Those discussions began Friday with a session at a Huntsville, Ontario, resort, a three-hour drive north of Toronto in Canada’s Muskoka lakes region.
“We need to act in concert for a simple reason: This crisisproved, and events continue to affirm, that our national economies are inextricably linked,” Obama said on the White House lawn before leaving for Canada. “At the G-20 summit this weekend, I’ll work with other nations not only to coordinate our financial reform efforts but to promote global economic growth.”
White House spokesman Robert Gibbs told reporters on Air Force One that Obama had taken a number of steps to deal with the financial crisis since taking office last year and now “he leads the world in financial reform.”
Leaders of the Group of Eight major industrial nations - the United States, Japan,Germany, France, Britain, Italy, Canada and Russia - met Friday to discuss plans to ease global poverty.
Those discussions were to move back to Toronto today and Sunday for talks with the larger G-20 group, which includes the rich countries and major developing nations such as China, Brazil and India.
The G-20 group represents 85 percent of the global economy, and the United States wants this group to endorse the outlines for global financial changes to eliminate the threat that banks facing tougher regulations in one jurisdiction will move their operations to countries with more lax rules.
Even before the summit began, the leaders engaged in a series of dueling letters and interviews that exposed theirconflicts.
A key discussion point for the G-8 was a proposal being promoted by Canadian Prime Minister Stephen Harper, the summit host, to bolster support for maternal and child health care in poor nations.
The G-8 was also holding an outreach session with leaders of seven African nations. Nigerian President Goodluck Jonathan said the G-20 should be expanded to include more African nations. At present, only South Africa is a member.
“If African nations have challenges, the West also pays for it,” Jonathan said in an interview in Toronto’s The Globe and Mail newspaper. Nigeria, Africa’s most populous country, would be a likely candidate for inclusion if the G-20 is expanded.
In an opinion piece the newspaper published Friday, new British Prime Minister David Cameron said he was determined to make his first international summit a success.
“Too often, these international meetings fail to live up to the hype and the promises made,” Cameron wrote. “A lot of money is spent laying them on. Host cities disrupted for days, even weeks. The cavalcades roll into town.”
Cameron said Britain’s main priority at the meeting was to hear each country provide details about plans for getting their “national finances under control.” Information for this article was contributed by Rob Gillies, Darlene Superville, Jane Wardell and Tom Raum of The Associated Press.
Business, Pages 29 on 06/26/2010