MercoPress. South Atlantic News Agency

Last minute agreement on tax havens completes G20 agenda

US President Obama negotiation skills surprised many leaders

As G20 negotiations on a new regulatory blueprint bogged down, President Barack Obama pulled French President Nicolas Sarkozy and Chinese President Hu Jintao into a corner of a room in London’s Excel Centre, according to press reports from London.

Obama was seeking to bridge differences between Sarkozy, who wanted to publish a list of tax havens from the Organization for Economic Cooperation and Development, and the Chinese, who opposed it. Obama’s chat with Sarkozy produced a proposal for Hu, who considered it, a US official said.

Obama called Hu over, eventually pulling Sarkozy back in and arriving on a compromise: The G-20 would promise action against tax havens, note the OECD list and go no further.

“Tax havens were the subject of frank debate right up until a few minutes ago” Sarkozy told reporters after the meeting ended. “We ended up doing a three-way meeting. Obama was very helpful to me.”

Two days before the meeting began French Finance Minister Christine Lagarde said Sarkozy was prepared to walk out unless the summit adopted strict international finance regulations. German Chancellor Angela Merkel told reporters she was worried the G-20 might try to “suppress the problems and paint things in a brighter light than they are.”

The day before yesterday’s formal meeting, Sarkozy and Merkel held a press conference to step up calls for tighter regulations and told reporters the leaders weren’t yet close to an agreement. Meanwhile, Japanese Prime Minister Taro Aso criticized Germany’s unwillingness to boost spending.

Merkel, who supported Sarkozy’s stance on tax havens, called the agreement a “victory for common sense.” Obama, she said, had been “especially concerned that we get good results” and “was involved in solutions to very specific problems.”

The UK delegation also seemed impressed with Obama, because most of Brown’s team made their way into the room where he was talking to listen to him.

Obama said he had come to the G-20 intending to listen, learn, show some humility and help encourage the “best answer.” The US president was quoted saying “I think we did OK”.

Sarkozy also revealed that G20 leaders will meet again in New York in September, around the time of the United Nations General Assembly.

“We have decided... that the third G20 summit will take place during or after the United Nations General Assembly in September in New York” Sarkozy told a press conference.

Sarkozy said the third G20 -- which follows a summit in Washington in November last year and today's meeting -- would focus on “evaluation” and that the process should continue as the crisis economic goes on.