G20 finance chiefs meet on global imbalances
PARIS — G20 ministers gather in Paris Friday to hammer out common criteria for measuring global economic imbalances at a two-day session that host France hopes will lead to an overhaul of world finance.
French President Nicolas Sarkozy was due to receive the ministers and central bankers from the 20 top developed and developing economies at 6:00 pm (1700 GMT) at the Elysee palace and give a speech, his office said.
Sarkozy has vowed to reform the world monetary system and commodities markets during his year at the G20 helm, saying he aims to defend poor economies from currency and trade turbulence.
Before treating the illness, however, leaders must agree on the symptoms so these talks -- the first official G20 gathering of France's presidency -- will seek to agree on the indicators to be used to measure the economic gaps between them.
"Once we have these indicators, and that's highly debated at the moment and will be in the next couple of days ... then we will move on to agree on guidelines" for action, Finance Minister Christine Lagarde said on Thursday.
A source close to the negotiations said there has already been "quite tough debate" over the French plans, with the so-called "BRICS" -- Brazil, Russia, India, China and South Africa -- expressing strong reservations.
The BRICS nations have scheduled a side meeting at 1330 GMT on Friday ahead of the formal G20 talks. Separately, US Treasury Secretary Timothy Geithner will hold a closed meeting with Lagarde at 3:45 pm (1445 GMT), his office said.
Some Western powers see the talks as "a roundabout way of ultimately treating the problem of China," whose huge trade surplus and foreign currency reserves they see as the most important of the global imbalances, the source said.
The United States and other Western powers accuse China of holding down its currency to boost Chinese exports. China denies any such manipulation, blaming the imbalance on structural problems in its trade partners' economies.
China last year resisted a US proposal to stabilise current account balances by setting a four-percent cap on countries' deficits and surpluses.
Officials say questions on the agenda for Friday and Saturday include how to assess countries' current accounts, exchange rates, currency reserves, public budgets and private savings. But countries are haggling over the details.
The European Union, in a paper seen by AFP, has called for specific target figures to be fixed and has suggested postponing debate on the most sensitive issues if necessary.
"What we do not want is to dictate to one or the other country -- 'stop being competitive, stop exporting, stop consuming,'" Lagarde said on Thursday at a meeting of finance leaders.
"The goal is to to try to reach a better equilibrium that will be beneficial to all, from an inflation point of view for instance, or from a social fabric point of view."
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