G20 leaders craft crisis response

Paris and Berlin, fearing the summit would fall short of the mark on regulation of tax havens, hedge funds and markets in general, went in gunning for concrete announcements.

"Any regulations we don't agree here, won't be agreed for the next five years," Merkel told a joint news conference with her French counterpart on Wednesday. "The summit is not about horse-trading between regulation and economic growth programs."

"In the results, we want the principle of new regulation to be a major objective ... This is not negotiable," French President Nicolas Sarkozy added.

Obama, making his first official visit to Europe, said G20 nations were not going to agree on every point but brushed aside suggestions the summit would falter because countries were split over the importance of regulation versus new stimulus packages.

"The core notion that government has to take some steps to deal with a contracting global market place and that we should be promoting growth -- that's not in dispute," Obama said.

"On the regulatory side, this notion that somehow there are those who are pushing for regulation and those who are resisting regulation is belied by the facts."

Sarkozy earlier threatened to disassociate himself from any "false compromises" at the summit, the second such meeting of world leaders to try to tackle the problems created by the downturn and credit crunch, which in turn began when the U.S. housing market collapsed over two years ago.