Brown hopeful of G20 agreement

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Indy Politics

Gordon Brown still believes he can broker an agreement among the world's biggest economies to take further fiscal action to shorten the recession, despite disagreements with France and Germany at the weekend.

The German Chancellor, Angela Merkel, and the French Finance Minister, Christine Lagarde, said further tax cuts or spending programmes were a matter for individual governments rather than something to be agreed upon collectively. They hinted they would not sanction a collective declaration of action at next month's meeting of G20 countries in London, but No 10 refused to play down expectations.

The Treasury minister, Stephen Timms, defended the "very wide" agreement reached at the weekend's G20 meeting in West Sussex after Ms Merkel and Mme Lagarde argued that existing measures had to be given time to work before further action was taken.

Sources at No 10 and the Treasury said hopes for fresh action were raised at a pre-meeting dinner on Friday for the finance ministers, where officials detected widespread support for continuing "fiscal stimulus" measures.

"The meeting is still two weeks away and people should not pre-judge its outcome at this stage," a No 10 source said. "European leaders, including Germany, have already shown their support for the need for a fiscal stimulus."

Several areas of agreement were found during the meeting of finance ministers, including a pledge to more than double the resources handed to the International Monetary Fund.

Finance ministers agreed on a firming up of international regulation, including stronger supervision of new financial institutions such as hedge funds. Mr Brown has invested a lot of political capital in the G20 summit on 2 April.