Rift threatens to torpedo G-20 summit

French President Nicolas Sarkozy has warned the G-20 summit must agree tough rules to govern banks.
The G-20 summit began Thursday, with leaders looking to repair a rift after France and Germany threatened to withdraw their support unless tough new rules were agreed to regulate the world’s financial markets.

U.S. President Barack Obama and British Prime Minister Gordon Brown said that delegates at the London summit needed to act with urgency and in unison to address the financial crisis. Obama said G-20 delegates had “a responsibility to act with a sense of urgency” and come up with “tough new rules” for managing the world economy. “We’ve passed through an era of profound irresponsibility,” Obama said. “Now, we cannot afford half-measures and we cannot go back to the kind of risk-taking that leads to bubbles that inevitably burst. So we have a choice: We either shape our future or let events shape it for us.” Brown called on world leaders to cooperate in achieving five tasks at the one-day summit, starting with restoring growth to emerging market economies and agreeing to “clean up” the global banking system.

Fact Box This week’s London Summit brings together the leaders of the world’s 20 largest economic powers, known as the Group of 20, to discuss the global financial crisis and decide new measures to set the world on a more stable economic footing.

There will be no sustainable recovery until a new regulatory system for the banks is put in place, Brown said. He also wanted countries to commit to do “whatever is necessary” to encourage growth and help the poor, protectionism to be rejected and a push for investment in the environment. However, French President Nicolas Sarkozy and German Chancellor Angela Merkel warned they would not sign up to an agreement at the summit if the new rules were not tougher. At a joint press conference at a London hotel Wednesday night, the two leaders made clear that they were not satisfied with the proposals currently on the table. Watch more on the G-20 summit » “Germany and France will speak with one and the same voice,” Sarkozy said. “These are our red lines.” Earlier Wednesday, thousands of anti-capitalists, anarchists and environmental campaigners descended for protests in several locations around the British capital.

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The most violent demonstrations took place near the Bank of England, Britain’s central bank. People broke several dark-tinted windows of a Royal Bank of Scotland branch and crawled inside. Demonstrators also spray-painted the word “thieves” and the anarchist symbol on the side of the building. Watch more on the protests »

Three people were arrested at the bank — two for aggravated burglary and one for arson, a police spokesman said. Organizers said there would be tight security at the summit Thursday.