European leaders meet on Sunday to form a consensual approach to tackle the global economic crisis, while U.S. President Barack Obama is due to unveil an ambitious plan to cut the ballooning deficit in half by 2013.
Financial markets plumbed new lows last week on fears governments may have to intervene to nationalize struggling banks and as grim global economic data sent investors scurrying to seek safety in gold and U.S. government debt.
European powers gather in Berlin, determined to inject new momentum into efforts to overhaul the global financial system and show they can come up with a coordinated response to a historic economic downturn.
The leaders are under pressure to deliver on pledges made at the November G20 summit in Washington, where they unveiled an action plan to combat the financial mess and guard against further meltdowns.
Since that summit, recessions in Europe and the United States have deepened, forcing governments to push through massive stimulus packages that have rekindled fears of protectionism.
German Chancellor Angela Merkel is hosting the leaders of Europe's big economies and is keen for the meeting to focus on long-term financial reforms and not be hijacked by new problems, notably worries about the fragility of some euro zone nations.
The Berlin summit aims to forge a European consensus ahead of a G20 summit in London on April 2.
British Prime Minister Gordon Brown wants EU states to improve coordination of economic support plans ahead of the London summit, his spokesman said on Saturday. The White House announced Brown would also meet Obama in Washington on March 3.
With euro zone countries such as Ireland under severe financial stress, Germany said big euro states had begun thinking about how they might come to the aid of weaker members for the first time in 10-year history of the currency area.
In Dublin, nearly 100,000 people marched through the city on Saturday to protest at government cutbacks in the face of a deepening recession and bailouts for the banks.
Grim euro zone services and manufacturing data dragged European shares to 6-year lows on Friday on worries about the prospect of more capital increases and bank nationalizations.
OBAMA AIMS TO CUT U.S. DEFICIT
In the United States, officials said President Barack Obama wants to slash the ballooning deficit in half by 2013, after massively increasing public spending to stem the economic crisis.
Obama will outline his ambitious goal when he hosts a summit at the White House on Monday on fiscal responsibility and later in the week when his administration presents a summary of its first budget, for the 2010 fiscal year.
With hundreds of thousands of Americans losing their jobs in the global economic meltdown, Obama has said fixing the U.S. economy is his top priority. He has acknowledged that his success or failure in that will define his presidency.
We can't generate sustained growth without getting our deficits under control, Obama said in his weekly radio address.
An administration official said Obama was proposing to cut the deficit, which private economists project will rise to $1.5 trillion this year, through a mixture of tax increases on wealthier Americans and spending cuts.
In the banking sector, U.S. financial regulators will soon launch a series of stress tests to determine which of the largest U.S. banks should get bigger capital cushions in case of a deeper recession, a person familiar with Obama administration plans said.
In Asia, the region's finance ministers meet on Sunday to discuss cooperation to tackle the global crisis plus the expansion of a currency swap agreement, at a time when some of their currencies are tumbling.
The 10 members of the Association of Southeast Asian Nations (ASEAN) plus Japan, China and South Korea pledged last year to pool bilateral currency swap arrangements under the so-called Chiang Mai Initiative (CMI) in an $80 billion multilateral fund that could be tapped in emergencies.
The finance ministers are meeting in the Thai resort island of Phuket.
(Reporting by Reuters bureaux worldwide; Editing by Jeremy Laurence)