The London Times has the story of the stunning rebuff to UK Prime Minister Gordon Brown and President Barack Obama at the G20 meeting this week:
GORDON BROWN’S carefully laid plans for a G20 deal on worldwide tax cuts have been scuppered by an eve-of-summit ambush by European leaders.
Angela Merkel, the German chancellor, last night led the assault on the prime minister’s “global new deal” for a $2 trillion-plus fiscal stimulus to end the recession. “I will not let anyone tell me that we must spend more money,” she said. The Spanish finance minister, Pedro Solbes, also dismissed new cash being pledged at Thursday’s London summit. “In these conditions I and the rest of my colleagues from the eurozone believe there is no room for new fiscal stimulus plans,” he said.
The assault by European Union leaders also represents a defeat for President Barack Obama, who is desperate for other big economies to copy his $800 billion stimulus plan.
“There will be a very long communiqué, but there won’t be much in it,” said a Washington economist.
Adding to the disarray, a draft of the agreement Brown hopes to secure was leaked to a German news magazine, prompting suggestions of “dirty tricks” by Berlin. The draft stated that Britain wanted a “$2 trillion” global fiscal stimulus. However, the figure appeared only in brackets, indicating agreement on the package had yet to be reached. The stimulus would boost world growth by 2% and employment by 19m, the draft said. The rest of the document was mainly general pledges.
Merkel’s criticism drew an angry response from Labour MPs. Denis MacShane, the former Europe minister, said: “Who does Mrs Merkel think is going to buy Mercedes and BMWs if she . . . says putting demand into the economy is a bad thing?” Another Labour MP said: “One has to ask who had something to gain from the leak of the communiqué. This feels like a dirty trick.”
There are growing fears that protests at the summit venue, the ExCeL centre in London’s Docklands could be marred by violence. Scotland Yard will be deploying specialist officers trained to use 50,000-volt Taser stun guns.