Divisions hang over G20 as crisis deepens

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LONDON, April 1 (AFP): World leaders gathered today for a summit on tackling the global financial crisis but many were split on the way forward, as data from Japan and the United States illustrated the magnitude of their task.
The Group of 20 meeting has been dogged by rows even before it starts in London on Thursday with Japan's prime minister launching the latest salvo by hitting out at European claims that fiscal stimulus is not the answer.
While Tokyo and Washington favour pumping more money into economies to spur growth, European nations-led by France and Germany-are sceptical about spending more than they have and say tighter global financial regulation is the priority.
But in an interview with the Financial Times newspaper, Japanese premier Taro Aso hit out at their stance.
"Because of the experience of the past 15 years, we know what is necessary, while countries like the US and European countries may be facing this sort of situation for the first time," he said.
"I think there are countries that understand the importance of fiscal mobilisation and there are some other countries that do not-which is why, I believe, Germany has come up with their views."
On Tuesday French President Nicolas Sarkozy threatened to walk out of the summit if leaders refuse to address his calls for stronger regulation to head off future crises.
The White House has rejected reports of any rift, and President Barack Obama, who arrived in London Tuesday, has said any talk of regulation versus stimulus was a "phony debate".
However, back home a survey found that 51 per cent of Americans want Obama to pull the plug on troubled banks without extending any more bailout money.
The Zogby poll said there should be no more federal funds even if that means banks going out of business and just six per cent said bailout money should continue.
Meanwhile grim news continued to mount for the world's leading economies as Japan's most closely watched measure of business confidence fell to an all-time low.
The Bank of Japan said its quarterly Tankan poll of large makers of electronics, cars and other products found confidence had tumbled to minus 58, even lower than the minus 57 recorded in 1975, in the wake of the oil shock.
The index measures the per centage of firms that think business conditions are good minus those that think they are bad.
The figures follow recent data that revealed Japan's exports are about half what they were a year ago, unemployment is at a three-year high and consumers are spending less.
In the US hopes for a turnaround for the world's biggest economy were hit when figures showed home prices in the 20 largest cities fell by a record 19 per cent in January from a year ago.
The Standard & Poor's/Case-Shiller survey showed Tuesday that the year- on-year decline was steeper than analysts' consensus forecast of an 18.6 per cent drop, and eclipsed December's record decline of 18.5 per cent.
A separate index of home prices in the 10 largest metropolitan areas also posted a record decline, of 19.4 per cent from January 2008.
The two monthly indices have fallen steadily since October 2007.