Leaders to ponder economy

Summit to begin in Washington

WASHINGTON -- The leaders of 20 of the world's largest economies will gather today and Saturday in Washington to search for a way out of the biggest global economic meltdown in decades.

What they'll accomplish in a session presided over by lame-duck President George W. Bush remains to be seen.

So far, the run-up to the Group of 20 summit has been marked by disagreement between European and U.S. officials over how much additional regulation is needed to end the crisis and to prevent similar problems from breaking out again.

European leaders have supported more regulations on the financial institutions that have been widely blamed for the credit crunch that's strangling global economies. The Bush administration, however, has warned against interfering too much in economies and opposed creating a global regulator of financial markets.

The leaders of developing countries have complained bitterly that the financial turmoil started by irresponsibility in the United States and Europe has dragged down their booming economies.

Such debate promises to be the summit's main attraction as world leaders hesitate to take any concrete steps while the Bush administration remains in power. President-elect Barack Obama won't attend the meeting, sending in his place former Clinton administration Secretary of State Madeleine Albright and former U.S. Rep. Jim Leach of Iowa, a Republican.

Stock markets around the world could tumble anew if the debate gets too contentious, said Charles Freeman, a former U.S. assistant trade representative for China affairs. "There's nothing positive that can come out of this meeting," Freeman said. "If you're Obama, you don't want your fingerprints anywhere near this."

Officials in Europe and the United States, however, said the summit would be the beginning of a long process of reshaping global financial institutions weakened by the crisis. They plan a follow-up meeting early next year.

President George W. Bush fervently defended U.S.-style free enterprise Thursday as the cure for the world's financial chaos, not the cause. He warned foreign leaders ahead of the weekend summit not to crush global growth with restrictive new rules.

"We must recognize that government intervention is not a cure-all," Bush said from Wall Street, setting his own tone for the two-day meeting. "Our aim should not be more government. It should be smarter government."

He spelled out his prescription, which includes tougher accounting rules and more modern international financial institutions. But he stopped short of the tighter oversight and regulation European leaders want. All his ideas came with a warning: Don't disturb capitalism.

"In the wake of the financial crisis, voices from the left and right are equating the free enterprise system with greed, exploitation and failure," Bush said. "But the crisis was not a failure of the free market system. And the answer is not to try to reinvent that system."

The G-20 is composed of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States and the European Union.