MercoPress. South Atlantic News Agency

Pittsburgh G-20 summit kicks off with minor clashes in the streets

Geithner said a consensus to limit bankers’ pay and bonuses by the end of 2009 had been reached

Trouble has flared as world leaders gathered Thursday in the US city of Pittsburgh for the G20 summit. Reports said riot police used pepper gas and fired rubber bullets at protesters on a march near the venue.

Demonstrations were widely expected and thousands of extra police are on duty. The previous G20 meeting, in London in April, was marred by clashes.

Economic stability, financial regulation, climate change and bankers' bonuses are set to top the G20 agenda.

The clashes are thought to have begun after hundreds of protesters tried to march, without permission, towards the convention centre where the summit is being held.

With many major economies beginning to climb out of recession - attention will turn to when and how to withdraw government stimulus packages.

Cracking down on bankers' bonuses has popular appeal with the public, it is expected that an agreement will be reached on how that might be achieved.

US Treasury Secretary Timothy Geithner said G20 countries had reached a consensus on the “basic outline” of a proposal to limit pay and bonuses by the end of 2009.

Each country would set their own standards, he said, but that these would be overseen by the G20's Financial Stability Board - made up of central bankers and regulators.

Earlier, Chancellor of the Exchequer Alistair Darling warned bankers that the “party was over” and they must realise that the world has changed.

A spokesman for the White House said that financial regulatory reform was the most important agenda item for summit, but that addressing global economic imbalances was also a priority.

President Barack Obama has led a campaign to smooth out imbalances in the flow of global capital to try to secure greater long-term economic stability.

The US proposal calls on economies such as China, Brazil and India to boost domestic consumption in order to lower their trade surpluses. Meanwhile the US and Europe would encourage more saving to reduce long-term budget deficits.

Director of the US president's National Economic Council, Larry Summers, said that a “balancing global growth approach” would be needed.

“The US can't, should not and won't continue to experience the consumption-led growth driving very high volumes of imports and lending impulse to the rest of the world economy,” he told the BBC.

“That's not a sustainable financial situation for the US and that's why we're in the process of adjusting.”

Other discussions will involve the continuation of talks over whether countries such as China, India and Brazil should have greater say on the board of the International Monetary Fund. (BBC)