British Prime Minister Gordon Brown said on Tuesday there was substantial support among the Group of 20 nations for creating a new framework to tackle global economic imbalances.

But French Economy Minister Christine Lagarde said she feared growing signs of economic recovery could undermine commitments to rework and regulate the world financial order.

This meeting is a real challenge, she told a news conference. We are currently seeing, notably in the United States sufficient signs of recovery that numerous players are saying ... let's go back to our old habits and carry on with our business as we did in the past.

Analysts said the United States' drive to agree a roadmap for a more balanced global economy could meet resistance from China which is unlikely to agree reforms that would threaten its growth.

Washington wants G20 leaders meeting in Pittsburgh this week to discuss ways to redress economic imbalances that many blame for triggering the financial crisis.

A document outlining the U.S. position ahead of the September 24-25 summit said big exporters, which include China, Germany and Japan, should consume more, while debtors like the United States ought to boost savings.

Speaking to reporters before flying to the United States, Brown, the current chairman of the G20 club, said a new global agreement was key to protecting jobs and growth.

I have been talking to many countries in Asia, as well as in Europe, and I have been talking to President Obama and others, and I believe that there is support for that framework, he said.

We are looking at how we can put in place for the future the mechanism or path that can lead us to making decisions about better ways of creating growth, he said.

The idea grabbed market attention on Tuesday.

The euro hit a one-year high against a sliding dollar ahead of a Federal Reserve meeting and the G20 talks on rebalancing, a process which is likely to require a weaker dollar.

But analysts were skeptical about concrete decisions coming from Pittsburgh.

These ideas that the U.S. and Europe can come up with a deal to resolve imbalances is a pipe dream and unworkable, said Maurice Pomery, managing director at Strategic Alpha in London.

A discussion at the G20 on currencies, and especially the dollar, is not only appropriate but essential, as this move could accelerate swiftly, Pomery said of the dollar's fall.

French officials have said the Pittsburgh summit should pave the way for a later discussion on currencies, although they will not be explicitly discussed this week.


While most countries may be willing to pay lip-service to the idea of redressing imbalances, how far they go in practice remains to be seen.

China, brimming with confidence as the world's fastest-growing economy, may extend a cooperative hand but analysts were doubtful that it would be willing to let go of its managed currency and whopping trade surplus easily.

China will certainly want to understand more of what the United States is proposing before making any commitments, said Wang Yong, a professor of political economy at Peking University.

China would want to ensure that there are no binding conditions and no chances of the document being used as a pretext for trade protectionism.

Another issue on the agenda at the summit will be the plight of emerging markets and their need for funds.

Argentina is seeking to return to international credit markets but its ability to do so is being hampered in part by its failure to resolve defaulted Paris Club debt.

A French source said on Tuesday that Lagarde had not received a request to meet Argentine officials on the sidelines of the G20 summit to discuss Paris Club debt.

Argentine media reported that Economy Minister Amado Boudou was scheduled to meet her in Pittsburgh as part of negotiations to reach agreement to pay back $6.7 billion in defaulted debt owed to the group of sovereign creditors.