WASHINGTON -- The U.S. will press world leaders to boost emergency government spending to lift the global economy, risking a rift with European nations more concerned with revamping financial regulation.
In President Barack Obama's first foray into economic diplomacy, Washington will urge the shift at a summit next month in London, U.S. officials say, as markets look for a unified plan of action from the world's most economically powerful nations.
Washington's focus is at odds with France, Germany and other European nations that want the Group of 20 summit on April 2 to focus on rewriting rules governing financial markets. These nations say lax regulation was a major cause of the financial crisis and want to tighten their grip on hedge funds and private-equity firms.
All sides are looking to avoid a breakdown at the summit that would roil markets, which are already wary about whether government leaders know how to stem the economic decline, say U.S. officials and international economists. Expectations of the summit are high: A coordinated response is seen as critical so each government's efforts reinforce, rather than impede, the efforts of others.
The differences could be hashed out this coming weekend in London at a meeting of finance ministers from the G-20, and in Washington, in the steady stream of global leaders and finance ministers visiting Mr. Obama.
U.S. officials, who could receive support from China and other countries with big stimulus programs, contend additional government spending is needed to reduce the depth and length of the downturn.
Britain also may have an easier time seeing eye-to-eye with the U.S. than other European countries because both London and Washington are concerned that tighter financial regulation could harm their financial centers. Administration officials also say the G-20 isn't ready to put new regulations in place, so focusing in that area would be counterproductive.