TIMES ONLINE: Franco-German demands upset G20 unity

The leaders of France and Germany delivered a stunning ultimatum to Gordon Brown tonight when they demanded binding reform of world financial markets as the price of their support at tomorrow's G20 summit.
Nicolas Sarkozy and Angela Merkel made the comments at a joint press conference at which they promised that they would "speak with one voice" at the meeting in London's Docklands.
Having already scuppered Gordon Brown's plans for the summit to agree on a massive and coordinated fiscal stimulus, the two European heavyweights are demanding that it now move to do away with the "light-touch" Anglo-Saxon model of regulation blamed for the current economic crisis.
"The summit communique needs to set out very concrete steps," said Mrs Merkel, the German Chancellor. "The summit must delineate the new architecture of financial markets.”
“Our objective is simple: we demand results in London; we want concrete results," added President Sarkozy, who has threatened to walk out of the summit if it does not go the right way. "This is not negotiable."
The Franco-German intervention came after a day marked both by Barack Obama's international summit debut and by violent protests in the City of London.
Police made at least 24 arrests as anti-capitalist protesters tried to upstage the G20. They included 11 demonstrators trying to drive an armoured personnel carrier towards the Bank of England.
Thousands gathered outside the Bank and scuffles soon broke out. The most violent action came when a group of hardline protesters stormed a branch of the Royal Bank of Scotland, which received billions of pounds of taxpayer funds last year but has been widely criticised for rewarding its former chief executive with a huge pension.
After arriving in the UK last night, Mr Obama kicked off a long day of meetings with breakfast at 10 Downing Street.
HIs outsized motorcade was just the first in a series of armoured convoys due to pass through the Downing Street gates. The Prime Minister was also holding talks with President Medvedev of Russia, President Hu of China, the Indian Prime Minister, Manmohan Singh and Taro Aso, Prime Minister of Japan.
But Mr Sarkozy and Mrs Merkel were not due at No 10 until this evening, when all the G20 heads of state and government were meeting for a pre-summit dinner. At a joint press conference with Mr Brown, Mr Obama denied that there was any real disagreement on the need for governments to boost their economies, just normal discussions as to how best to do it.
"The truth is that that's just arguing at the margins," he said. "The core notion that government has to take some steps to deal with a contracting market place and to restore growth is not in dispute."
Mr Brown also did his best to laugh off Mr Sarkozy's walk-out threat. "I'm confident that President Sarkozy will be here not just for the first course of our dinner but will still be here when we complete our dinner this evening," he said.
While Mr Brown focused on the G20, Mr Obama took advantage of his trip to hold his first meetings with both Mr Medvedev and Mr Hu - and both events appeared to have paid immediate dividends.
Mr Obama had already stated his desire to "reset" relations with Russia, which were strained especially during Russia's invasion of Georgia last year.
Even before today's talks the two men announced in a joint statement that they would try to put a new nuclear arms reduction deal into place before the expiry of the current treaty in December. The White House also announced that Mr Obama would be visiting Moscow this summer.
"Over the last several years, the relationship between our two countries has been allowed to drift," Mr Obama told reporters after the meeting. "What I believe we’ve begun today is a very constructive dialogue that will allow us to work on issues of mutual interest."
The US President's next meeting was with Hu Jintao of China - and included agreements on various fronts, including the resumption of discussions on human rights.
The White House said that the the two men had agreed to establish a "strategic and economic dialogue" group - chaired by Treasury Secretary Timothy Geithner and Chinese Vice Premier Wang Qishan - that will hold its first meeting in Washington later this year.
While hopes of a new co-ordinated international stimulus of the world economy have faded, the G20 negotiations are proceeding on rules to curb excessive bonuses, control tax havens, extend regulation to hedge funds, introduce greater co-operation between national regulators and draw up fresh mechanisms to stop protectionism.
The summit at the ExCeL centre in Docklands comes as the World Bank said that the global economy would shrink by 1.7 per cent this year and the Organisation for Economic Co-operation and Development predicted a 2.7 per cent contraction, the worst since the Second World War.
But while Mr Brown pointed out that G20 governments had already agreed fiscal stimulus packages totalling more than $2 trillion, Mr Obama warned that the rest of the world could not simply rely on "voracious" American consumers to drive the global recovery.
"If there is to be new growth, it cannot just be the United States as the engine," he said. "Everyone is going to have to pick up the pace."