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Pageantry, policy and protest jostled for position yesterday as leaders of the world's key economic powers joined President Barack Obama for the G-20 kickoff dinner and discussions while demonstrators skirmished with police across the city.
In remarks at the David L. Lawrence Convention Center, U.S. Treasury Secretary Timothy Geithner sketched out the U.S. goals for the meeting, predicting that the Pittsburgh G-20 Summit discussions that conclude today will produce broad agreement not just on an ambitious set of goals for economic reforms but on timetables for assessing progress toward them.
As the world leaders were gathering at the Phipps Conservatory a few miles away, Mr. Geithner said the chief U.S. priority was to forge a consensus on a path away from crisis that would also lead away from the cycle of boom-and-bust. The importance the Obama administration is placing on the meeting was underscored by the fact that the president plans to hold two news conferences today -- one in the morning, one in the afternoon before he departs.
"We're meeting at a time where, for the first time since [the G-20 summit in] London, certainly for the first time in a year, we're seeing the first signs of optimism about prospects for global recovery," Mr. Geithner said.
"Now, it's very important that as we lay a foundation for recovery we don't sow the seeds for future crises. In the run-up to this crisis many of the world's largest economies depended on the American consumer to buy their exports to drive growth, and we made it easy; for too long, Americans were buying too much and saving too little. And that's no longer an option for us or for the rest of the world."
The treasury secretary said the nations would seek consensus on tougher regulation for their financial markets, discouraging the culture of excessive risk that set the stage for the financial meltdown. This new regime, he said, while implemented differently in different countries, would be monitored by a newly empowered Financial Stability Board so that countries do not seek to attract investment with lax standards and scant oversight.
"We are not going to walk away from the greatest economic crisis since the Great Depression and leave unchanged, and leave in place the tragic vulnerabilities that caused this crisis," he said.
Beyond the search for consensus on the regulatory goals, he said, "we worked very hard over the last few weeks and months to get countries to agree to a set of objectives, a timetable, to put these reforms in place."
"But we can't do this alone," he added. "If we continue to allow risk and leverage to migrate where standards are weakest, the entire U.S.-global financial system will be less stable in the future."
A senior White House official last night said the G-20 will permanently replace the G-8 as the main forum for international economic cooperation in a move expected to give greater clout to developing nations. The change, pushed by Mr. Obama, will be announced today in Pittsburgh. It would make official a growing consensus that the G-20's broader membership better represents a new global economy, after the G-8 had been criticized for leaving out several of the world's fastest-growing countries.
"We have sought -- in word and deed -- a new era of engagement with the world. Now is the time for all of us to take our share of responsibility for a global response to global challenges," Mr. Obama told delegates in New York.
Mr. Geithner said the Financial Stability Board would emerge as a "fourth pillar" of the world financial architecture that emerged at the end of World War II, taking its place alongside the International Monetary Fund, the World Bank and the World Trade Organization. The FSB -- whose stature was elevated as one result of the last G-20 meeting in London -- is an institution including finance ministers, central banks and regulatory bodies such as the Securities and Exchange Commission.
Sketching another priority for the meetings that conclude today, he said governing structures of those institutions would have to change to reflect the growing dispersion of economic power across the globe.
He appeared to acknowledge that complementary shifts at the IMF and World Bank might represent an awkward accommodation for some powers, particularly European nations that would have to cede representation at the expense of developing countries. "I don't think there's anybody who would not believe this is the necessary, appropriate shift in the basic balance of representation in these institutions," he said. "I think Europe recognizes that."
As he opened his remarks he reiterated the administration's message that Pittsburgh was chosen as the site of the talks as "a powerful example of how a city can transform itself."
Politics Editor James O'Toole can be reached at
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or 412-263-1562. The Washington Post contributed to this report.
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