World finance leaders gather in Washington on Friday hoping to plot a course beyond the financial crisis but Greece's worsening debt woes served as a stark reminder the global economy remains vulnerable.
The Group of 20 rich and emerging countries, whose crisis-forged unity helped to end the global recession, must find common ground on controversial matters including regulating banks, rebalancing global growth and giving fast-growing emerging economies more clout.
Their talks were likely to focus also on the problems of Greece after the country's gaping budget deficit was revised even higher and investors rushed to sell its already battered debt on Thursday.
The G20 has essentially supplanted the smaller G7 club of advanced economies, an acknowledgement that this crisis emanated from the rich world which now needs help from fast-growing emerging powerhouses to solves global problems.
The united front, however, may already be fracturing. International Monetary Fund chief Dominique Strauss-Kahn urged the countries to stick close together on regulatory reform so that policies mesh.
The sharpest divisions were over bank taxes, with Canada strongly opposed and Britain pushing for support. Finance ministers are expected to discuss two bank tax ideas proposed by the IMF. The Fund will present a report to G20 heads of state who are meeting in Toronto in June.
Shin Hyun Song, a senior economic adviser to South Korean President Lee Myung-bak, said bank levies would be the big theme of Friday's meeting.
The aim is to recoup the cost of bailouts so banks, not taxpayers, pick up the tab, but it is also a way to discourage banks from placing so many risky bets again.
If we look at the bank levy idea more broadly as a means of changing behavior for the better, rather than just raising money, then it is much easier to sell this to other countries who didn't put any public money into the banking sector, he told Reuters.
He compared the bank levy to central London's congestion charge: The primary purpose of that is to discourage people from taking their car into central London, he said.
IT'S ALL GREEK
In September, when G20 leaders met in Pittsburgh to draw up economic recovery plans, the mood was somewhat more upbeat. Officials summed up their recession-fighting efforts with a two-word proclamation: It worked.
Economists widely agree that efforts to pump a combined $5 trillion in stimulus money into the economy and cut interest rates to the bone stopped the free-fall.
However, the rescue left most advanced economies shouldering debt burdens approaching World War Two highs, and Greece's fiscal troubles highlighted how risky that can be.
While Greece is not formally on the G20 agenda, it was clearly on the minds of officials gathering here -- dominating a G7 session on Thursday night.
Athens' problems are somewhat unique in that its data was faulty, disguising the true size of its budget deficit. The European Union's statistics office triggered Thursday's sell-off by saying the hole was even greater than thought.
European officials asked their counterparts from the United States and Japan for a show of support on Greece when they met at a dinner on Thursday, Japan's finance minister said.
When questioned whether Europe asked for U.S. and Japanese support in rescuing Greece from a deepening debt crisis, Naoto Kan said: Europe expressed such hope, but that is not about money. They seem to have wanted a show of support.
Debt burdens in rich countries and massive surpluses in exporting giants such as China are at the heart of the global imbalances the G20 has pledged to combat.
A U.S.-backed framework for global rebalancing was broadly embraced in Pittsburgh but implementation may prove tricky, particularly when the policy prescription is unpopular.
Reducing imbalances means China and other export-dominated economies must adopt policies to support domestic growth, which means letting currencies rise more rapidly and investing in social safety nets to try to promote consumer spending.
That could cool growth in the short run and make it hard to create sufficient jobs for a rapidly growing population.
China has rejected pressure from other countries to allow its yuan to rise in value but, after a quieting of criticism from the United States, leaders have signaled they might allow it to resume appreciating.
Fellow developing economy heavyweights Brazil and India, plus the European Union, have called for a stronger yuan in recent days although officials arriving in Washington ahead of the G20 meeting made few comments about the Chinese currency.
Japan's Kan said G7 ministers did not discuss the yuan.
(Reporting by G20 team; editing by Patrick Graham)