Obama Warns Others to Step Up to Crisis

ALISTAIR MACDONALDJONATHAN WEISMAN

Reuters

U.S. President Barack Obama and Britain's Prime Minister Gordon Brown met at No. 10 Downing Street ahead of the G-20 summit in London.

LONDON -- President Barack Obama conceded the U.S.'s culpability in events leading to the global economic crisis, but, in his first public appearance at a world economic summit here, was quick to warn that other countries must step up with solutions that don't rely on American consumers.

In a joint press conference with U.K. Prime Minister Gordon Brown Wednesday morning in advance of tonight's formal start of the Group of 20 meeting, Mr. Obama was quick to admit the U.S.'s role in the circumstances that led to the crisis.

"If you look at the source of this crisis, the United States certainly has some accounting to do with respect to a regulatory system that was inadequate," Mr. Obama said. But he added that similar mistakes were repeated in Britain and Europe, and added: "I am less interested in identifying blame than in fixing the problem."

He also tried to downplay growing divisions among the world's economic powers over how to resolve the crisis -- particularly on the topic of how much more fiscal stimulus is needed to jump-start world economies. Mr. Obama predicted the summit will result in an "enormous consensus" over the need for coordinated action to repair the ailing world economy.

Yet even as Mr. Obama appeared to give up on the idea that other countries would announce large stimulus package to kick start growth, he complained that the rest of the world cannot rely on the U.S. and its consumers to drive world growth

"If there is going to be renewed growth it can't just be the United States as the engine, everybody is going to have to pick up the pace," he said.

At the same time Mr. Obama asked American consumers not to cut spending back so much that it jeopardises recovery. "Don't short change the future because of fear in the present, and that I think is the most important message we can send not just in the U.S. but around the world," he said.

Later Wednesday, Mr. Obama is scheduled to meet with both Russian President Dmitry Medvedev and Chinese President Hu Jintao. His appearance with Mr. Brown came just as big street protests began in London's financial district. Those protests, some of which involve anarchists groups who have declared April 1 "Financial Fools' Day," had remained peaceful as of midday.

The G-20 is a forum for the world's economic powers to tackle the economic crisis, but the ramp up to it has increasingly revealed fractures.

Germany and France have complained loudly about U.S. and British attempts to move the topic of national stimuli onto the G-20 agenda. The two countries say the calls for additional stimulus haven't taken into account the packages they have already announced. Britain's Mr. Brown hinted that that language on stimulus packages will be limited to announcing the $2 trillion of spending plans that have already been announced around the world.

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Despite leaders' effort to downplay fissures, squabbles over how best to regulate the financial system continued to loom over the London summit hours before it was set to begin. French President Nicolas Sarkozy said Wednesday neither he nor German Chancellor Angela Merkel are happy with the proposals currently expected to emerge from the G-20 gathering. He threatened to walk away if the summit doesn't take a tough enough stand on regulations.

Mr. Brown said that the G-20 is within a "few hours of agreeing a global plan for economic recovery and economic reform."

According to the U.S. president this includes on the regulation of financial firms, derivative markets and off-balance-sheet vehicles, and in producing language that will reject protectionism and put forward the agenda's of emerging markets.

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Associated Press

Police controlled protesters outside the Bank of England Wednesday.

Mr. Brown set five tests for the G-20 members, who will be meeting in east London on Thursday: to agree to tougher and more transparent supervision of banks, hedge funds and off-balance-sheet vehicles; to "taking the action necessary" to bring about a resumption of global growth; to ensure greater international economic cooperation and strengthen economic instructions, such as the International Monetary Fund, that will help support growth in developing countries; to reject protectionism and kick start global trade; and to help the world's poorest by meeting minimum development goals and keeping pledges on aid.

After arriving in London late Tuesday, Mr. Obama and his wife Michelle arrived at No. 10 Downing Street early Wednesday for a round of meetings with Mr. Brown and his aides.

Amidst all the talk of the special relationship between the U.K. and U.S., President Obama appeared to hit out at Mr. Brown's habit of blaming the U.S. for his country's problems. While accepting some of the blame for the current crises, Mr. Obama told other countries to accept their portion of responsibility.

"There is no doubt that at a time when the world is fearful that there is a strong tendency to look for somebody to blame," he said.