EU sceptics reject US spending call

The leaders of France and Germany joined forces yesterday to insist that next month's G20 summit focus on tougher global financial regulations, rejecting US calls for European states to spend more on supporting growth.

Speaking after a joint meeting of their cabinets in Berlin, Angela Merkel, German chancellor, and Nicolas Sarkozy, French president, said it was crucial for the summit convened for April 2 in London to achieve “concrete results” on the regulatory front.

“In Europe, we have invested a lot into growth. The priority now is not to spend more but to put in place a system of regulation that will stop such a catastrophe from happening again,” Mr Sarkozy said.

“In Washington we agreed on principles, in London we want to see results,” he added, referring to last year's precursor G20 meeting, the first global political reaction to the financial and economic crisis.

Ms Merkel said “fiscal stimuli are important – and Europe has made its contribution in this regard – but they cannot replace the necessary regulation”.

The unusual show of harmony for two leaders whose relationship has generally been tense underlines their governments' dismay at recent suggestions from the US that the April 2 summit should focus on additional fiscal stimuli more than on regulation.

“This is the reason why we decided to speak with one voice today,” Ms Merkel said, asked about the US attitude as expressed in recent comments by Barack Obama, president, and Lawrence Summers, his economic advisor.

The Franco-German position is largely shared in the European Union. José Manuel Barroso, European Commission president, said yesterday the EU would make a “now or never” plea for stronger financial regulation at the April 2 summit and rule out more fiscal expansion to conquer the recession.