28 Mar 2009

Obama to urge Europeans to spend their way out of recession

9:47 am on 28 March 2009

United States President Barack Obama will make his debut on the world stage next week with calls for the most powerful economies to use government spending to jump-start growth.

Mr Obama will travel to London for the summit of the Group of 20 major economies on 2 April.

His popularity will probably elicit a warm greeting from Europeans, but his remedies for fixing the world economy could face a chillier reception.

European leaders have made clear they will not heed the US call for deficit spending and may prod the US to move further and more quickly to tighten financial rules. French President Nicolas Sarkozy and German Chancellor Angela Merkel in particular want tougher financial regulation to be the priority of the G20.

One European leader, Czech Prime Minister Mirek Topolanek, who holds the EU presidency, has condemned Mr Obama's economic recovery plans as "a way to hell".

Mr Topolanek, whose government collapsed on Wednesday in a Czech parliament vote of no-confidence, said the US was not taking "the right path".

He attacked the US's growing budget deficit and the "Buy America" campaign, saying "all of these steps, these combinations and permanency is the way to hell".

"We need to read the history books and the lessons of history and the biggest success of the (EU) is the refusal to go this way," he said.