Obama, meeting with world leaders on Wednesday, is the star attraction of the G20 summit in London. But when it comes to agenda-setting for the meeting of the world’s biggest economies, Europeans are taking the lead.
Obama arrives in Europe with much on his plate
US President Barack Obama made his debut on the world stage Wednesday, meeting with British Prime Minister Gordon Brown and other heads of state in London ahead of the G20 summit of leading economies.
As world leaders grapple with a deepening global recession, Obama hopes to leverage his popular appeal to rebuild US relations around the world, which suffered under his predecessor George W. Bush. Part of that process appears to be assuming a new posture when it comes to setting the summit agenda.
“The president and America are going to listen in London, as well as to lead," White House spokesman Robert Gibbs said.
Emerging from his first meeting on Wednesday, Obama remarked that the world had gotten used to the US being a "voracious consumer market" that drove economic growth.
American consumers' have thaken a more prudent stance in recent months, and in any case, Obama said, that it was a burden the US couldn't handle on its own.
Obama's solution thus far has been to replace consumer spending with massive govenment stimulus packages, a method that Brown has also employed in Britain. Both leaders believe that further state spending sprees are likely to be needed in order to turn the global economy around.
Europe pushes back
Merkel and Sarkozy hope to provide a counterweight to Brown and Obama
But even before Obama’s G20 debut, that view is already being challenged.
French President Nicolas Sarkozy said in a radio interview Wednesday morning that his country, as well as Germany, were not satisfied with pre-summit proposals put forward by the US and Britain. He said that the current draft “didn’t add up,” and that he and German Chancellor Angela Merkel, with whom he had spoken on Tuesday evening, were “exactly on the same wavelength.”
Sarkozy’s Finance Minster Christine Lagarde said on Tuesday that France was prepared to walk away from the summit if demands for much stricter regulation of international finance were not met.
Both France and Germany reject further large-scale government stimuli, and are set to insist on both an international registry to oversee hedge funds as well as a crackdown on offshore tax havens.
While the US has in recent years been an enthusiastic partner in pressuring countries like Liechtenstein and Switzerland to reform banking rules to inhibit tax evasion, the Bush administration repeatedly spurned German calls for regulation of hedge funds.
An economic crisis caused in part by the sort of risky investment practices engaged in by such funds, along with Obama’s desire for closer relations with Europe, may well force a change in American course on the issue.
Obama meets individually with Merkel and Sarkozy on Friday, after the close of the G20 summit, on the sidelines of NATO’s 60th anniversary summit.
Medvedev and Obama meet for the first time in London
Also on Wednesday morning, Obama is to meet Russian President Dmitry Medvedev, the latest in a series of small steps which the two powers have taken towards improving ties which had turned frosty in the latter period of the Bush administration.
Obama has already shown willingness to scale back plans for a missile-defence system in Poland and the Czech Republic. At this week's NATO summit, Russia can expect full relations to be restored, after they were suspended during the invasion of Georgia in August. However, the US has refused to back down on NATO plans to expand eastward towards Russia's border.
Later on Wednesday's agenda, Obama was scheduled to meet with Chinese leaders, a week after he had rejected China's call to replace the dollar with a global reserve currency.
China is the United States' largest creditor, holding 740 billion dollars in US government bonds. Concerned about the value of those holdings, China's leadership has been critical of US monetary policies aimed at stimulating the economy.