Divided world leaders open economic summit

Divided? Canadian Prime Minister Stephen Harper, right, speaks with United Kingdom Prime Minister David Cameron as they walk with other G8 leaders to the family photo at the G8 Summit in Huntsville, Ontario, on Friday. AP/The Canadian Press, Sean Kilpatrick

World leaders, divided on economic policies, searched for common ground on health, security and other issues as three days of summits began Friday in Canada.

There was little expectation of breakthroughs on economic issues from the weekend meetings of the Group of Eight and Group of Twenty.

President Barack Obama has called for more spending to keep world economies from slipping back into recession. But he was being rebuffed by leaders in Europe and Japan, who have emphasized cutting government spending and raising taxes to try to keep their deficits in check.

Obama carried fresh momentum on another issue the leaders will address: overhauling financial regulations to prevent another global meltdown. On Friday, U.S. lawmakers reached a compromise on sweeping new financial rules that could become law within weeks. Still, it seemed doubtful that Obama could corral world leaders to follow the U.S. example.

A Japanese spokesman, Kazuo Kodama, said Friday that new Japanese Prime Minister Naoto Kan told his counterparts from Canada and Germany that North Korea's alleged torpedo attack is a "threat to the peace and stability of the region." Kan wants summit partners to issue a "clear message of condemnation" of North Korea, the spokesman said.

Leaders of the G-8 - an aging club comprising the U.S., Canada, Britain, Germany, France, Italy, Japan, and Russia - met for their annual session at a resort in Canada's sprawling Muskoka region of lakes and vacation cottages north of Toronto.

On Saturday and Sunday, the focus was to shift to Toronto, where they will be joined by 12 leaders representing fast-growing developing economies including China, India and Brazil.

At a time when leaders were discussing fiscal austerity, Canada's prime minister, Stephen Harper, has come under criticism over the projected costs of the summits, including at least $900 million for security and $2 million for a theme park inside the media center that includes an artificial lake with canoes, trees, deck chairs and a fake dock.

Leaders also faced skepticism about how much summits actually accomplish. In an opinion piece published Friday in the Canadian newspaper the Globe and Mail, new British Prime Minister David Cameron wrote that calls to action and pledges issued regularly by the Group of Eight and other economic groupings seldom bear fruit.

"The G-8 needs to demonstrate to the public that when we get together and sign up to these things, we mean it," Cameron said.

Unmet pledges getting special attention this year: the G-8's vow in Scotland five years ago to double international aid to Africa by 2010 and to make significant strides in providing access to AIDs treatment to all who need it. Neither of those goals have been achieved.

The G-8 was holding an outreach session with leaders of seven African nations. Nigerian President Goodluck Jonathan said the G-20 - which now has only one African member, South Africa - should be expanded.

"We are talking about the global village. What affects one nation affects the other. If African nations have challenges, the West also pays for it," Jonathan said in an interview with The Globe and Mail. Nigeria is Africa's most populous country.

Another top discussion point for the G-8 was a proposal by Canada's Harper to bolster support for maternal and child health care in poor nations. Harper said Canada's contribution was $1.1 billion. The White House said that the U.S. commitment would total $1.35 billion over two years, with that support subject to congressional approval.

While most attention this year focused on economic issues, the leaders were also expected to discuss the world's tense hot spots, including the long-lasting war in Afghanistan, tensions in the Middle East and nuclear ambitions of Iran and North Korea. Those discussions were planned for Friday night.

The U.S. and its allies will be looking to persuade China to support U.N. Security Council action to hold North Korea accountable for the sinking of a South Korean warship in March.

On Iran, the U.S. and European nations will push other major powers to join them in imposing tough new sanctions on Tehran over its nuclear program, building on expanded Security Council measures adopted this month.

But China and Russia only reluctantly supported the sanctions, and have balked at new unilateral steps against Iran, saying any measures should not exceed those called for by the Security Council.

Russia's bid to join the World Trade Organization could also come up. Obama voiced strong support on Thursday after a meeting in Washington with Russian President Dmitry Medvedev.

The G-8, once the world's premier forum for discussing and coordinating economic policy, has been gradually overshadowed by the G-20.

After showing strong solidarity in earlier sessions during the height of the financial crisis, the G-20 leaders are divided now over whether to stimulate economic growth with more spending or to rein in budget deficits in light of debt crises in Greece and other heavily indebted nations.

Cameron, the British prime minister, is siding with budget austerity and sounded a skeptical tone Friday over the ability of leaders to carry out their soaring promises.

Cameron's government unveiled an emergency budget Tuesday that included higher taxes and the toughest cuts in public spending in decades. "Those countries with budget deficits need to do that and, as a world, we need to address the imbalances," he said Friday after meeting with Harper, the summit host.

Obama's call for more spending has run into resistance at home as well as at the summit. Opposition Republicans, citing concerns about the U.S. deficit, managed Thursday to block a Democratic proposal to fight unemployment.

But Obama hoped Congress' compromise on revamping financial regulations would prompt other nations to make similar changes.

"We need to act in concet for a simple reason: This crisis proved and events continue to affirm that our national economies are inextricably linked," Obama said on the White House lawn before leaving for Canada.

The G-20 group represents 85 percent of the global economy and the United States wants this group to endorse the outlines for global financial reform to eliminate the threat that banks facing tougher regulations in one jurisdiction will move their operations to countries with more lax rules.

With security extremely tight both in Huntsville and Toronto, there were few new incidents of problems, although street demonstrations in Toronto were planned for later in the day.