Merkel, Brown minimize G20 differences

Marketwatch ^ | 9:12 a.m. EDT March 14, 2009 | William L. Watts, MarketWatch

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HORSHAM, England (MarketWatch) -- British Prime Minister Gordon Brown and German Chancellor Angela Merkel on Saturday downplayed a rift between the United States and Europe over Washington's calls to boost government spending to lift global demand.

"Every country has made a major contribution to fiscal stimulus," with efforts by major nations resulting in the largest round of global stimulus "the world has ever seen," Brown said at a London news conference following a meeting with Merkel.

The bilateral meeting came as finance ministers and central bankers from the world's 20 most powerful industrialized and developing nations met at a luxury hotel in southern England to lay the groundwork for the summit meeting of Group of 20 leaders in London early next month.

European officials, particularly from Germany and other euro-zone nations, have bristled at calls by U.S. Treasury Secretary Timothy Geithner and others for nations to boost fiscal stimulus efforts. While U.S. officials haven't named names, the remarks have clearly been aimed at pressing Europe's biggest economies to add to already-announced stimulus efforts, economists say.

Geithner has called for most major countries to provide a stimulus equal to around 2% of gross domestic product. European Union officials have agreed to provide around 200 billion euros, or around 1.5% of the EU's GDP, in stimulus.

Merkel said it was premature to begin talking about additional stimulus, saying that much of Germany's own spending plan has yet to kick in.