Obama, Brown urge global action on economy
Tue Mar 3, 2009 3:38pm EST
By Caren Bohan and Sumeet Desai
WASHINGTON (Reuters) - U.S. President Barack Obama on Tuesday urged coordinated action to fight the worldwide economic crisis, joining British Prime Minister Gordon Brown's call for a global response.
A month before Obama travels to London for a summit of the Group of 20 major developed and emerging economies, the United States and Britain are grappling with turmoil in their banking sectors caused by toxic mortgage securities.
The bad debt has crippled lending and added to fears in global stock markets about a worsening recession.
Obama told reporters during his Oval Office meeting with Brown that he was "absolutely confident" his administration's plans to shore up the banking system would work and played down the big declines in the stock market.
In comments that gave a lift to battered share prices, Obama said there were "potentially good deals" in the market at current levels.
"What I'm looking at is not the day-to-day gyrations of the stock market but the long-term ability for the United States and the entire world economy to regain its footing," he said.
"One of the things that Prime Minister Brown and I talked about is how can we coordinate so that all the G20 countries, all the major countries around the world, in a coordinated fashion, are stimulating their economies?"
Obama and Brown both called for common principles to bolster the financial regulatory structure.
'GLOBAL NEW DEAL'
Brown, a former finance minister whose Labour Party is struggling politically, has faced criticism at home for what some see as his failure ahead of the financial crisis to tighten up Britain's regulatory structure.
Brown was the first European leader to visit Obama since the president took office on January 20.
Ahead of his trip to Washington, he called for a "global New Deal" in which countries would work together to jumpstart growth, revamp financial rules and boost funding to the International Monetary Fund.
U.S. stock prices this week hit their lowest level in 12 years, in part over anxiety about whether Obama's plans to deal with the banking sector would yield success.
The summit of G20 countries will mark Obama's debut as president on the world stage. The group includes developed economies like France and Italy as well as big emerging economies such as China and Brazil.
Both Britain and the United States will be eager to show leadership on the global economic crisis but many abroad lay blame for the problems on housing bubbles allowed to fester in those two countries. Continued...But Brown was undaunted in his insistence that countries had to work together.
"We've had a global banking failure and it's happened in every part of the world," he said.
"We've got to rebuild that financial system," he added. "We've got to isolate the bad assets. We've got to underwrite the financial system so that loans can start again to businesses and families."
The meeting between Obama and Brown was followed by a working lunch. The British prime minister will deliver a speech on Wednesday to the U.S. Congress, where he plans to lead a charge against protectionism.
The high profile accorded to Brown's visit did not dispel anxiety that what London calls the "special relationship" might not be as strong as it once was.
The Brown visit has raised comparisons to the relationship between Obama's and Brown's predecessors, George W. Bush and Tony Blair, who forged a close friendship in the aftermath of September 11 attacks in 2001.
Some analysts said there seems to be less of a focus on Europe in the early weeks of the Obama administration than has been the case for past U.S. administrations.
Secretary of State Hillary Clinton visited Asia on her first trip abroad and is in the Middle East this week.
The serious, dry Brown seemed to want to emphasize his rapport with the charismatic new U.S. president, at one point referring to Obama by his first name.
British media last week seized on a White House spokesman's use of the phrase "special partnership" as a possible indication that the relationship had been downgraded.
But Obama said his administration was as committed as ever to the alliance, adding it was sustained by a common language and common history.
"This notion that somehow there is any lessening of that special relationship is misguided," Obama said.
Brown said he hoped his visit would renew already strong bonds.
"It's a partnership of purpose that is born out of shared values," he said.
(Editing by John O'Callaghan)