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Germans call on G20 to cut fiscal deficits

GERMANY has called for agreement from members of the G20 summit in London on ways to back away from fiscal measures put in place to fight the global financial crisis.<br /><br />&ldquo;It is of vital importance that we develop internationally coordinated exit strategies,&rdquo; wrote German finance minister Peer Steinbrueck, in a letter to fellow G20 finance ministers and central bankers.<br /><br />&ldquo;Then, when the right time comes &ndash; that is, when the recovery has established a firm footing &ndash; we must show the same degree of international coordination in putting these strategies into action,&rdquo; he wrote.<br /><br />He proposed that fiscal measures were reduced as soon as possible so deficits reached a sustainable level.<br /><br />Financial regulation is also expected to be a hot topic at the meeting, to be held on Friday and Saturday.<br /><br />At a meeting in April in London, leaders of the G20 agreed to extend regulation and oversight &ldquo;to all systemically important financial institutions, instruments and markets&rdquo; including systemically important hedge funds.<br /><br />France&rsquo;s finance minister Christine Lagarde has gone so far as to say her country will walk away from the summit if its demands for stricter financial regulation are not met.<br /><br />However, France wants a stronger global financial regulator than both the US and the UK would like.<br /><br />Both UK Prime Minister Gordon Brown and US President Barack Obama have spoken of their high hopes for the meeting to stimulate international recovery.<br /><br />Brown has also pledged to clamp down on bankers&rsquo; bonuses, although, in an interview, he declined to support a French plan for a mandatory cap.<br /><br />Meanwhile Chancellor of the Exchequer Alistair Darling urged European governments to hand the International Monetary Fund more money than they previously pledged so as to support poorer countries.<br /><br />Darling said the 27 European Union nations should provide the IMF $75 bn (&pound;43bn) on top of the $100 bn they have already committed. He said the UK will pay up to $11 billion more.