Posted on Thu, Apr. 02, 2009
last updated: March 15, 2013 11:58:25 AM
LONDON — The G-20 economic summit reached a final agreement to restore the world's economy Thursday only after President Barack Obama personally intervened and negotiated a compromise between France and China, White House officials said.
It was a remarkable stroke of personal diplomacy by a new president who's making his debut this week on the world stage.
The pact calls for added spending to stimulate growth, new regulation over all "systemically important" financial institutions including hedge funds, $1 trillion for the International Monetary Fund and an effort to list tax havens, as a way to "name and shame" them into becoming more transparent and cooperating with international rules.
Heading into the summit's final hours, however, it appeared that the group would fail to reach a consensus, as French President Nicolas Sarkozy pushed to have the G-20 spotlight offending tax havens based on a list published Thursday by the Organization for Economic Cooperation and Development, and China objected, largely because it doesn't belong to the OECD.
That was when Obama, long a champion of ending or curbing tax havens, decided to float a compromise and pulled Sarkozy aside, according to a senior White House official, who spoke on the condition of anonymity as a matter of policy.
"The president thought he could be helpful in resolving the differences," the official said.
Obama proposed that the G-20 merely "take note" of the OECD list, thus opening the door to implicit but not direct endorsement of that list.
"He sent a message to the Chinese. They were considering it (Obama's message) for some time," the official said.
Obama then met with Chinese President Hu Jintao and Sarkozy in a corner of the summit meeting room, as the other world leaders waited.
Upon the trio's reaching agreement, the G-20 summit then agreed to note the list of tax havens.
Sarkozy, who'd threatened days earlier to walk out of the summit if he didn't get his way, said the final agreement represented "great progress."
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