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G20 Remedies Begin To Take Shape, But Differences Remain

Participants of the G20 summit pose in London on April 2.

Participants of the G20 summit pose in London on April 2.

It was smiles all round as the summit's host, British Prime Minister Gordon Brown, greeted his guests.

Handshakes for the cameras with each one; a friendly pat on the back from French President Nicolas Sarkozy.

Their task -- to agree steps to pull the world out of recession and help prevent future crises. And all this in just a few hours of talks.

In an echoey hall at the conference site, ExCel Centre in east London, Brown's opening comments were ones of optimism.

"I believe the text that is being circulated already reflects the very high degree of consensus and agreement that now exists between all of us," Brown said.

But as talks began, leaders still had to iron out differences on some of the issues on the agenda.

Chief among them -- whether to commit more government spending for ailing economies, as pushed by the United States and Britain, but resisted by France and Germany.

A draft communique obtained by Reuters makes no specific commitment to extra fiscal stimulus.

Instead, France and Germany emphasizes the need for tighter financial market regulation.

The draft cited by Reuters agrees to regulate large hedge funds. There would be an early warning system run the IMF and a new body, the Financial Stability Board, to identify any risks building up.

'Aggressive' Regulation?

To be sure, Washington says it wants tougher regulation, too. Obama said his treasury secretary, Timothy Geithner, this month proposed "as aggressive" a set of regulatory measures as any G20 member.

But the difference appears to be one of degree. France and Germany say they want concrete measures, rather than promises of action, particularly on tax havens -- those low-tax places beloved of businesses and wealthy individuals keen to avoid paying the taxman.

"This opportunity, to build a new world is one we don't want to let pass," Sarkozy said on the eve of the G20 meeting. "We are in the 21st century, it is time to lay down the basis of regulation for the 21st century."

Still, agreements on other items were taking shape.

IMF Triples Resources

British business minister Peter Mandelson told the BBC that leaders had agreed to "a substantial" increase in cash for the International Monetary Fund (IMF) to help countries in crisis.

Reuters quoted G20 sources as saying the latest draft of the G20 communique calls for an increase of IMF resources by $500 billion, which would make available total funding of $750 billion. That would effectively triple the amount of resources for the global financial institution.

They're also expected to boost money for trade, though again debate continues over how much.

There were discussions, too, on the sidelines of the G20.

Obama and South Korean President Lee Myung-bak gathered to discuss how to respond if North Korea goes ahead with a planned rocket launch. Pyongyang's plans have raised tensions as Washington and its regional allies suspect it is using the launch to test long-range missile technology.

Obama is also to hold meetings with the leaders of India and Saudi Arabia.

Meanwhile, police are out in force after thousands of people took to the streets of London on April 1 to protest globalization, climate change, and war. There were violent clashes during which one man collapsed and died.

A handful of protesters gathered outside the London Stock Exchange in the City as the G20 meeting got under way, while others made their way to the conference center in the former docklands of east London.

But with heavy security in place at the ExCel Centre, the protesters were expected to be kept well out of sight of the conference participants.

compiled from wire reports