France, Germany Threaten G-20 Deal

France and Germany have joined forces in London at the Group of 20 summit and are threatening to abandon the global economic recovery deal if it doesn’t meet their specifications for tougher financial regulations. French President Nicolas Sarkozy and German Chancellor Angela Merkel say they won’t budge on tax havens, hedge fund regulation, banker pay caps, and several other financial regulations. “The crisis didn’t spontaneously erupt in Europe, did it?” Sarkozy asked, suggesting that Europe would not be taking orders from the U.S. on financial matters. Sarkozy warned earlier of his intentions to walk out of the summit if his demands were ignored, but with Merkel on his side the threat carries much more weight. Earlier Wednesday, British Prime Minister Brown spoke of the agreement being “within hours.” President Obama had a threat of his own: “If there’s going to be renewed growth it can’t just be the United States as the engine,” he said. “Everybody is going to have to pick up the pace.”