French President Nicolas Sarkozy insisted yesterday that G20 leaders must use their London summit to crack down on tax havens, warning Paris and Berlin are not happy with current drafts for an accord.
France has thrown down the gauntlet ahead of today’s summit of leading world economies, threatening to walk out unless there is a deal on tough new regulation of global finance and curbing offshore tax havens.
Sarkozy said he spoke with German Chancellor Angela Merkel late on Tuesday and that they had agreed that, while “no firm agreement has been reached” between G20 negotiators, the latest draft deal “didn’t add up.”
“Neither France nor Germany are satisfied with the proposals as they currently stand,” Sarkozy told Europe 1 radio just hours before taking the presidential jet to London to meet fellow G20 leaders in Downing Street.
Sarkozy and Merkel were to press their demands for new accounting norms, regulation of trader bonuses, a registry of hedge funds and a clampdown on tax havens.
Merkel said she was heading to London with a mixture of confidence and concern.
“Concern on one hand on whether we can really react to the serious situation, on whether we are not playing things down and making them out to be better than they are,” she told reporters in Berlin.
“Confident, however, that in view of the extremely difficult situation, we cannot stick our heads in the sand, that we have to act and also recognize our responsibilities,” she said.
The idea of a walkout received little support from Merkel whose spokesman said it was “not the best idea.”
The G20 meeting has exposed painful divisions over how best to tackle the crisis, which the World Bank forecast a would see the global economy contract by 1.7 percent this year.