Be careful this week about buying wholeheartedy into any G20-related spin about supposedly savvy, free-spending Britain and America doing more to combat the world economic crisis than supposedly stubborn, overly cautious Germany and France. The actual figures show it is much more complex than that.

A Reuters calculation on discretionary fiscal stumuli and the International Monetary Fund's assessment show that, if anything, Britain is the significant laggard and that German spending almost matches the United States over the next two years. Here are the IMF's numbers (% of GDP):

                                                          2009                     2010

 Germany                                             1.5                       2.0
 France                                                 0.7                      0.7
 UK                                                      1.4                     - 0.1
 US                                                      2.0                       1.8

Just to add to the complexity, discretionary spending estimates do not include bank bailouts (which would boost UK and U.S. anti-crisis spending numbers)  But nor do they include automatic economic stabilisers such as existing social welfare schemes and safety nets (which would boost Germany and France versus the U.S.  where such things are rare to non-existant).

There is bound to be some squabble over who is doing what when the G20 starts on Wednesday. Just remember the numbers.

(Reuters photo: Juan Medina)

Stopping off in New York during a marathon, 18,000-mile diplomatic offensive before next week’s G20 summit in London next week, British Prime Minister Gordon Brown recalled a conference held in eerily similar circumstances in London 76 years ago.

Sixty-six nations gathered for the June 1933 London Monetary and Economic Conference which was aimed at lifting the world’s economy out of the Depression.

But amid American opposition to European plans to return to a system of fixed exchange rates, the conference collapsed and the world put up trade barriers, jobless ranks swelled and the rise of Fascism took the world into war.

“There was no further progress other than a resort to protectionism for the rest of that decade,” Brown told a business audience during a five-day pre-summit tour that has taken him to the European Parliament in Strasbourg, New York, Brazil and Chile.

Brown must be hoping desperately that history will not repeat itself when he hosts a meeting of leading industrial and developing economies in London on April 2 to try to chart a way out of the worst global financial crisis since the 1930s.

Again there have been signs of transatlantic division in advance of the summit, with many Europeans resisting U.S. pressure for more fiscal stimulus to boost the economy, while the Europeans put the emphasis on tightening regulation of the financial sector.

Mirek Topolanek, prime minister of the Czech Republic which holds the current European Union presidency, was quoted this week as saying U.S. President Barack Obama’s huge economic stimulus plan was “the road to hell”.

Many countries are suspicious that their neighbours are resorting to protectionist policies to try to safeguard jobs at home.

Currency questions have caused friction between the United States and China, whose economies are now closely inter-dependent. Paul Volcker, a senior Obama adviser, gave short shrift to China’s proposal for a new world currency when asked about it at a New York roundtable with Brown this week.

Volcker said he understood restiveness about the “lopsided nature” of the current international monetary system but he said pointedly that the Chinese “didn’t have to buy those dollars in the first place”. A new international monetary system which suddenly devalued the dollar’s role was not practical, he said.

As Brown jetted around the world to bolster support for concerted action to lift the economy, he came up with a variety of ambitious and expensive proposals to revive trade and get the economy going again.

But he runs the risk of setting expectations for the London meeting too high, perhaps bringing crushing disappointment in its wake.

“If the G20 becomes a meeting just to set another meeting, we’ll be discredited and the crisis can deepen,” Brazilian President Luiz Inacio Lula da Silva said at a press conference with Brown in Brasilia.

Brown’s G20 envoy, Mark Malloch-Brown, voiced similar fears earlier this month. “If indeed we get anodyne committee conclusions where all substance has been taken out of them, the markets on April 3 will be something of a disaster zone, I have no doubt,” he said.

Brown has called for a doubling of IMF resources to $500 billion and for a $100 billion trade financing facility to help reverse a slide in exports. He has also called for an insurance policy for countries with big foreign currency reserves, such as China, so that they will feel able to use some of their reserves to boost the economy without fearing a run on their currencies.

U.N. Secretary General Ban Ki-moon, who Brown met in New York, urged the G20 to support a $1 trillion stimulus plan for developing countries.

With so many other demands on their cash, it is doubtful that even the powerful G20 economies will be able to find the vast sums needed for all of these programmes.

The huge media focus on the gathering of Obama and other world leaders in London, and the big protests that are expected to accompany it, will only heighten the anticipation.

British officials are trying to dampen expectations that a big new fiscal stimulus package will be approved at the G20 summit, saying they do not expect countries to put their national budgets on the table next week and suggesting that the results of the summit will be seen over the next year, rather than on the day of the summit.

Harsh economic reality may also force Brown to rein in his own wish to pump more resources into the British economy.

While he was away cheerleading for the G20, events back home kept intruding.

First — in a move one opposition lawmaker described as a “coup” — Bank of England Governor Mervyn King warned the government on Tuesday that its soaring budget deficit meant it would have to be cautious about any new stimulus for the British economy.

On Wednesday a sale of British government bonds failed for the first time since 2002, sending a warning to Brown that the markets may balk at financing ever higher British government deficits.

Then on Friday, Brown was given a lesson in economic management by Chilean President Michelle Bachelet who described how the money Chile had put aside in good economic times had enabled it to pump more cash into the economy during the downturn.

Brown’s Conservatives opponents at home say this is exactly what he failed to do during the years of prosperity – reduce the budget deficit so he had more financial firepower to help people through a recession.

As his ambitions clash with harsh reality, Brown may have to lower his sights both for the G20 summit and for the British economy.

[Photo: Prime Minister Gordon Brown (L) listens to Brazil's President Luiz Inacio Lula da Silva during a news conference at the Alvorada Palace in Brasilia March 26, 2009. REUTERS/Roberto Jayme]

A committee of MPs has warned police they must not impose restrictions on demonstrations “unless it is necessary and proportionate to do so.”

“The right to protest is a fundamental democratic right and one that the state and police have a duty to protect and facilitate,” said Andrew Dismore, chairman of the human rights committee.

The warning follows widespread protest at the way police handled a climate camp last year in Kent when demonstrators accused them of going in far too hard. 

They said police had used sleep deprivation and psychological tactics against environmentalists, including playing loud recordings of Richard Wagner’s “Flight of the Valkyries” and the Clash hit “I Fought the Law and the Law Won”.

With huge demonstrations expected in London next month for the G20 summit — probably the biggest since the anarchic Mayday protests of the 1990s – the issue is a topical one. 

Do you think the police here overstep the mark in their handling of public demos?

Finance ministers and central bankers from the G20 meet this weekend in the English countryside to discuss the world's financial and economic crisis. With this in mind, MacroScope asked a number of economists what they want to see from the meeting and the G20 summit to follow later and what they expect to see.

The answer, in short, appears to be that much is needed but not much expected.

Paul Mortimer-Lee, head of market economics, BNP Paribas:

"There will be progress on agreeing that regulation needs to be more effective and more effectively co-ordinated on a global scale but I am unconvinced we are going to go a long way further.  Some populist posturing on bank bonuses etc should be expected. The less is achieved in other areas the more this will get played up. On bank recapitalisation, they will all agree strong capital is a good thing, but in no way do I expect a concerted plan -- it's driven by events and the exigencies of the local banking system.

"I would like to see progress on the international financial architecture/the IMF and its resources. Maybe we'll get some new facility and some agreement on more new cash ... but a radical overhaul requires the power structure to be rejigged -- more power to the (emerging economies) and less to Europe. This is not something European politicians will want to be high profile when it comes out."

Sarah Hewin, senior economist, Standard Chartered:

"The economic data continue to worsen and markets remain in a state of fear. So the best outcome from the meeting would be a co-ordinated response to frozen credit markets and collapsing global economic activity.

"A wish-list would include announcements on: fixing banking systems, including cleaning up banks’ balance sheets by dealing with toxic assets; more and co-ordinated fiscal stimulus and wider adoption of quantitative easing; expanding the size of the IMF to enable it to support vulnerable countries; and commitments against protectionism.

"But the experience of previous summits is not encouraging - apart from increasing IMF resources and making the right noises on protectionism, we are likely to see few real progressive steps taken."

Gabriel Stein, director, Lombard Street Research:

"The G20 meeting, like almost all summits, is a waste of time. Most of the work will have been done beforehand and the actual meeting could just as well be delegated to functionaries. Its main purpose is political.

"It will issue a bland communiqué telling us that they agree on the need for further reforms and oversight of the world financial system, but that while co-ordination is useful, the actual details are better left to each country/region with its specific issues and problems. It will also warn against protectionism."

Alessandro Bee, economist, Bank Sarasin:

"I would like them to come up with a plan to solve the credit crisis, a coordinated plan. Also apowerful plan with some clear-cut strategies. What we see now is more like a series of individual plans that sometmes materialse and sometimes not.

"I would expect some annoucements rather than real decisions.*

So that's them. What about you? What do you want to see and what do you expect to see?

(Reuters photo: Peter MacDiarmid)

After all the angst, the special relationship is alive and well. For Gordon Brown, it must feel like job done, to a certain degree.

Before his trip to Washington, there was endless speculation about whether or not the new president really cared about the so-called special relationship between the two countries.

And while Brown may have been the first European leader to visit Barack Obama in the White House, Japanese PM Taro Aso got in there first.

Then there was the fuss about whether or not there would be a news conference. A snow storm and sub-zero temperatures this week in Washington meant the Rose Garden was out of the question.

The news conference was going to be a few questions in the Oval Office — Brown snubbed was the immediate reaction from some of the British media travelling with the prime minister.

But to be fair, Aso just managed a doorstep.

The truth is more likely that the new administration just has its own way of doing things. The full pomp and ceremony of a state visit might not seem totally appropriate when the economy
is in such dire shape and millions of Americans are worried about whether they will stay in work.

The Oval Office setting probably suited Brown more though as he managed to avoid the unease he sometimes possesses at his regular news conference in Downing Street.

And the two men were almost gushing over each other. We both have wonderful families, said Obama, when asked what they had in common — a probably more dignified frame of reference than
George W Bush saying he and Tony Blair shared the same toothpaste.

Sport was another shared passion, according to Brown, telling Obama he couldn’t compete with him at basketball. “Perhaps tennis,” said the prime minister.

“I hear you’ve got a game,” was the president’s reply.

Perhaps they’ll play at the London G20 summit next month, but for now the seal of approval from arguably the world’s most popular current leader is just what Brown needs as he lags in the opinion polls at home.