CANNES, France — Leaders of the world's most industrialized nations resumed talks here this morning on how to resolve Europe's continuing financial woes, apparently considering ways to set the stage for intervention from the International Monetary Fund.
George Osborne, Britian's Chancellor of the Exchequer, told BBC Radio that negotiations on boosting contributions to the IMF were ongoing, though whether individual countries would be asked to increase their contributions had not been determined. "There is a broad view among G-20 leaders that there does need to be additional IMF resourcing," Australian Prime Minister Julia Gillard said late Thursday night. "Leaders recognize that it is an appropriate move so people could be reassured."
The U.S. has suggested that the IMF should use its existing resources, saying that it's been bolstered since the U.S. financial collapse. Leal Brainard, the U.S. undersecretary of the Treasury, told reporters no decision had been reached on IMF intervention.
"The core . . . needs to be European commitment and European resources, and that is going to be the core of any successful effort," she said. "There area a number of ideas that are being discussed. I think the situation is fluid; I don't know where it will end up. But there are a number of, we think, constructive and creative ideas on the table."
The possibility of IMF intervention had obviously been a topic of conversation. When IMF director Christine LaGarde entered the meeting room before the start of the session, she could be heard to say, "I have my checkbook here," though it was unclear to what or whom the comment was directed.
The official event began late because the host, French President Nicolas Sarkozy, hadn't arrived. That allowed news reporters 45 minutes to watch as the world leaders mingled. President Barack Obama and administration officials used the lull before the official start to talk with British Prime Minister David Cameron and German Chancellor Angela Merkel.
Most of the conversation was out of earshot. Obama said "Morning, guys," when World Bank President Robert Zoellick walked up. Chewing gum throughout, Obama stood with Treasury Secretary Timothy Geithner, Treasury Undersecretary Lael Brainard, and Mike Froman, deputy national security advisor for international economic affairs. The group appeared to be in good spirits, at times laughing.
British Prime Minister David Cameron joined the group and he and Obama talked at length, gesturing and at times sharing a small laugh. Other UK officials joined them, including Osborne. Canadian Prime Minister Stephen Harper joined the group.
Obama's most intense conversation, however, appeared to be with Merkel, who the president engaged after his chat with Cameron ended. The two of them — no staffers — walked entirely out of hearing range to the back of the room, where they stood talking for several minutes. Obama listened, resting his chin on his hand while Merkel talked, she stood arms crossed as he spoke, gesturing with his hand.
At several points he briefly put his hand on her shoulder as he spoke, and finally sat perched on a nearby desk and continued talking as Merkel stood.
They were still talking when Sarkozy arrived and reporters were ushered out of the room.