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Obama, Brown urge global action on economy

(Agencies)
Updated: 2009-03-04 09:31

WASHINGTON - 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.

US President Barack Obama (R) speaks alongside British Prime Minister Gordon Brown during their meeting in the Oval Office of the White House in Washington, March 3, 2009. Brown will press Obama for details on his plans to fix the ailing US financial sector in talks on Tuesday that will focus on the global economic crisis. [Agencies]

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 yield results.

In comments that gave a temporary lift to battered stock prices, Obama also said there were "potentially good deals" to be found at the market's current depressed 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.

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"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.

On Afghanistan, where the security situation has been deteriorating, Obama said he would be making a "series of announcements" on the subject before a NATO summit to take place on April 3-4 in Strasbourg after the G20 gathering.

'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 to tighten up Britain's regulatory structure before the financial crisis.

He was the first European leader to visit Obama since the president took office on January 20.

Before traveling to Washington, Brown called for a "global New Deal" in which countries would work together to jump-start growth, revamp financial rules and boost funding to the International Monetary Fund.

US 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 that were allowed to fester in those two countries.

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. We've got to isolate the bad assets."

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