Huffpost Politics

US, Britain discuss coordinated action on economy

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WASHINGTON — Prepping for a global financial summit, President Barack Obama and British Prime Minister Gordon Brown signaled together Tuesday that internationally coordinated regulatory and stimulus action could help end the economic crisis that has swept the world.

Obama and Brown met at the White House, sitting down in the Oval Office for about an hour and sharing a working lunch afterward in the residence. It was their third meeting, though the first since Obama became president in January.

Brown came into the session hoping to reach agreement with Obama on a pact to take into the summit of advanced and developing nations meeting in London early next month. The British leader has been arguing for what he calls a "global New Deal," a reference to the sweeping Depression-era U.S. policy that overhauled the banking and financial system, plowed money into public works and created Social Security.

Brown, who is chairing the so-called G-20 economic summit, wants the same banking standards governing transparency, disclosure, accountability and other issues that apply in the U.S. and Britain to apply to institutions in other nations, particularly those in areas like Eastern Europe or Latin America.

Obama said he and Brown discussed how to make sure that all the world's major economies, developed and developing, are coordinating what they are doing to stimulate their economies and to make sure "there are a common set of principles, in terms of how we're approaching banking, so that problems that exist in emerging markets like Hungary or the Ukraine don't have these enormous ripple effects that wash back onto our shores,"

"All those steps, I think, are going to slowly build confidence," Obama said.

"There's got to be deep regulatory change," said Brown. "A bad bank anywhere can affect good banks everywhere. So we've got to root out the problems that exist in other parts of the world, as well, set principles with the banking system for the future, and make sure that the banks subscribe to lending agreements where they actually increase the lending that is available to citizens in every country."

It wasn't clear that Obama signed on completely to Brown's ambitious agenda, which requires not only agreement on a single set of guidelines among a hugely diverse set of nations but also a mechanism for policing and enforcing it.

White House press secretary Robert Gibbs said the leaders are "in agreement ... without anything specific coming out of it."

"Because money can be transferred around the world so quickly, it's important to have a baseline financial understanding of what can and can't happen," Gibbs said.

The two nations have shared interests on other urgent matters, such as the deteriorating situation in Afghanistan, Iran's nuclear program and global warming. The leaders discussed those issues, but _ with the economies of both nations in a tailspin _ they came up only briefly when they appeared together before reporters.

For Brown, who has been falling significantly behind the conservative opposition in British opinion polls, the meeting presented a big opportunity. With his political fortunes in doubt, the British leader hoped that standing shoulder-to-shoulder with his much more popular American counterpart would give him a boost.

At the same time, he needed to strike the right tone, not appearing too reluctant to challenge his trans-Atlantic ally and suffer the kind of withering criticism directed at predecessor Tony Blair, who was called George W. Bush's poodle by his detractors. So Brown also hoped to demonstrate to Britons back home his leadership on economic issues by talking about solutions on a high-profile world stage.

Brown is set to address a joint session of Congress on Wednesday with a tough message, that the United States must avoid any protectionist tilt, even though it has a populist appeal in the rough economic times.

In a sign of how sensitive some in Britain are about their nation's status with the United States, the way the two leaders' public schedules described their joint appearance caused a flap early in the day. Some in London took offense because while Brown's office said there would be a news conference, the White House called it a "pool spray," a term referring to a less formal and more brief session with reporters. The White House said no slight was intended.

A senior official said there had been some discussion at one point about holding the joint appearance in the Rose Garden _ considered a higher-profile setting for presidential appearances with visiting foreign leaders. But a big snowfall in Washington on Monday ruled that out, even while a more extensive question-and-answer session had never been on the table because the two sides preferred to devote the extra time to the working lunch, said the official, who spoke on condition of anonymity because of the diplomatic sensitivity involved.

In any case, Obama paid great attention to dismissing any talk of downgraded relations, nearly touching Brown on the arm as he spoke of their growing personal kinship and using the term prized by Britons _ a "special relationship" _ three times.

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Associated Press writers Desmond Butler and David Stringer contributed to this report.