The idea of a tax on financial transactions championed by France and Germany is unlikely to gain much traction at the next meeting of leaders of the world’s 20 largest countries because it faces opposition both within the European Union as well as from countries such as the U.S. and Canada.

French President Nicolas Sarkozy Thursday said the EU will propose a tax on financial transactions to the G-20 when it gathers at the end of next week in Toronto, stressing that France and Germany would work together to make this a “major issue” and are even ready to implement it without the support of others.

Sarkozy didn’t specify, however, what the proceeds of such a tax would be used for, but France has said in the past it favors using it to fund efforts to control climate change, foster innovation or fight poverty. Germany, on the other hand, sees such a tax as a way to curb speculation….

A person close to the IMF said the report to be submitted to G-20 leaders next week will mention the idea of a financial transaction tax, while making clear it isn’t the best way to make the banking sector cover the cost of future crises or to limit systemic vulnerabilities. The report will also point out the concern that the cost of such a tax would be passed on to clients, and that it doesn’t necessarily target the riskiest types of trades.

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Prime Minister Gordon Brown is pedaling smartly back on his proposal for a financial transactions tax or ‘Tobin Tax’ after his surprise presentation, delivered at a Group of 20 finance meeting in Scotland, was met with a chorus of criticism over the weekend.

It is believed that Brown’s handling of the issue provoked renewed dispute with the Treasury. Chancellor Alistair Darling is said to be frustrated by the prime minister’s promotion of a plan he already knew would be publicly shot down by the US.

The American rejection of the proposal – “A day-by-day financial transactions tax is not something we are prepared to support,” said US Treasury Secretary Tim Geithner (above, with Alistair Darling) – was followed by rejections from Canada, Russia, the International Monetary Fund and the European Central Bank.

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He comes out solidly against the dumb transaction tax idea. Well worth the time. Watch it all (about 6 1/3 minutes)–KSH.

The United States and Britain voiced disagreement Saturday over a proposal that would impose a new tax on financial transactions to support future bank rescues.

Prime Minister Gordon Brown of Britain, leading a meeting here of finance ministers from the Group of 20 rich and developing countries, said such a tax on banks should be considered as a way to take the burden off taxpayers during periods of financial crisis. His comments pre-empted the International Monetary Fund, which is set to present a range of options next spring to ensure financial stability.

But the proposal was met with little enthusiasm by the United States Treasury secretary, Timothy F. Geithner, who told Sky News in an interview that he would not support a tax on everyday financial transactions.

What a disappointment Gorden Brown is turning out to be. This is a very bad idea that he has come out behind, and his timing could not be worse. Fortunately, even the Russian finance minister spoke against it. In any event, read it all–KSH.

Archbishop Robert Duncan of the Episcopal Diocese of Pittsburgh (Anglican) and Pentecostal Bishop Joseph Garlington of Covenant Church of Pittsburgh in Wilkinsburg, led the congregation in noon prayer, swaying together to the songs as they prayed aloud above the music.

Karen Phillips, an administrative assistant from Greensburg, told the congregation that she felt the history of conflict between many G-20 nations.

“Each one has built a wall. They know how to walk into a room and greet one another, but in their hearts, the walls are up,” she said. “I pray that true feelings and emotions will be exchanged, and that in that exchange there will be healing.”

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Love the comment about the parks–watch it all.

In rich countries, more than a third of all energy is used to heat, cool and light buildings, or used within buildings, efficiently or not. Climate change demands we slash that consumption.

That’s one reason why President Obama is hosting this week’s G-20 summit at the David L. Lawrence Convention Center and the Phipps Conservatory and Botanical Gardens — two buildings that are “gold” certified for their energy-efficiency design characteristics by the U.S. Green Buildings Council.

The venues are part of the message: investments in renovation and energy-aware construction can be a big part of a green jobs strategy. If the United States is to be a global competitor in green building technology, it needs to learn from some of the other countries that will be at the table in Pittsburgh.

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President Obama and the leaders of Britain and France will accuse Iran Friday of building a secret underground plant to manufacture nuclear fuel, saying it has hidden the covert operation from international weapons inspectors for years, according to senior administration officials.

The revelation, which the three leaders will make before the opening of the Group of 20 economic summit here, appears bound to add urgency to the diplomatic confrontation with Iran over its suspected ambitions to build a nuclear weapons capability. Mr. Obama, along with Prime Minister Gordon Brown of Britain and President Nicolas Sarkozy of France, will demand that the country allow the International Atomic Energy Agency to conduct an immediate inspection of the facility, which is said to be 100 miles southwest of Tehran.

American officials say that they have been tracking the covert project for years, but that Mr. Obama decided to make public the American findings after Iran discovered, in recent weeks, that Western intelligence agencies had breached the secrecy surrounding the project. On Monday, Iran wrote a brief, cryptic letter to the International Atomic Energy Agency, saying that it now had a “pilot plant” under construction, whose existence it had never before revealed.

But President Mahmoud Ahmadinejad said nothing about the plant during his visit this week to the United Nations, where he repeated his contention that Iran had cooperated fully with inspectors, and that allegations of a nuclear weapons program are fabrications.

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Standing in the lobby of a Downtown hotel, a key adviser to the U.S. delegation to the G-20 Summit promised an array of religious leaders that he would carry their concern for the poor into the economic conclave.

“We value your input and we know you hold us accountable,” said Michael Froman, dubbed the “sherpa,” after Himalayan mountain guides, because he leads the way to the summit. He is a deputy national security adviser specializing in global economics. “I appreciate your prayers. We will need them. This summit is about fixing financial systems … but also about addressing the needs of the most vulnerable.”

He cautioned the 30 religious leaders against expecting major new initiatives. He expects to focus on fixing “gaps in the infrastructure of how nations deal with crises,” he said. “I hope you will see that this is a meeting that advances the agenda we jointly care about. But it is one step in an ongoing crisis.”

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When world leaders gathered in April to coordinate action on the international economy, it was in shambles. Billions of dollars in government spending and financial bailouts later, it’s on the road to recovery.

The challenge facing leaders gathering here today for the third summit in less than a year is to stay the course rather than declare victory and reverse it, U.S. officials and outside experts say.

“Pittsburgh is not intended to be a victory lap,” says Michael Froman, deputy national security adviser for international economic affairs. “We may have come back from the brink, but I don’t think people are at all complacent about where we are.”

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Low expectations have been met. Divisions on how to deal with the financial crisis remain. Imbalances in the global economy lie uncorrected. But the G20 summit took important steps in improving the machinery for coping with the financial crisis. The mere fact of agreement will have expanded, in Gordon Brown’s phrase, the oxygen of confidence in the global economy.

To judge a summit primarily by its contribution to psychology may appear to trivialise a crisis that is widely compared to the Great Depression. Yet confidence is the crucial missing ingredient. Its absence has directly caused the collapse of the Western financial system….

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By acting together to fulfil these pledges we will bring the world economy out of recession and prevent a crisis like this from recurring in the future.

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Attempting to bridge deep divides in policy and financial philosophy, the leaders of nearly two dozen of the world’s largest economies agreed Thursday to a broad array of new fiscal and regulatory steps, in a desperate effort to revive the paralyzed global economy.

At the conclusion of the first economic summit meeting to rivet world attention in decades, Prime Minister Gordon Brown of Britain announced that the leaders had committed to $1.1 trillion in additional loans and guarantees to finance trade and bail out troubled countries.

But the funds he announced are well short of a direct injection of stimulus into the world’s economic bloodstream ”” the result of a continuing division between continental Europe and much of the rest of the world over whether to act now or wait see how current spending measures take effect.

“This is the day the world came together to fight against the global recession,” Mr. Brown declared. “Our message today is clear and certain: we believe global problems require global solutions.”

Read it all. The IMF nes in particular is most welcome..

Britain predicted on Thursday that world leaders would bridge their differences on steps to recover from the deepest global economic downturn since World War II, as President Obama and his counterparts from more than 20 industrial and developing countries began a day of talks here.

Prime Minister Gordon Brown, who greeted Mr. Obama and the other leaders in a seemingly endless cavalcade of motorcades, said the Group of 20 had agreed to tough language against protectionism, including a pledge to “name and shame” countries that erect trade barriers.

Negotiators from the United States and Europe worked frantically to hash out an agreement on new regulations, a day after France and Germany signaled a rift over the level of scrutiny that regulators should have over hedge funds and global financial institutions.

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But despite calls for unity from Mr. Obama and the British prime minister, Gordon Brown ”” the host of the Group of 20 meeting that formally begins Thursday ”” the French and German leaders held a joint, and combative, news conference to underscore their differences with the Anglo-American approach to the crisis.

While President Nichoals Sarkozy of France did not repeat an earlier threat to walk out of the conference ”” “I just got here,” he joked ”” he made it clear he would reject an agreement that puts off stringent new regulations on banks, tax havens, and hedge funds.

“The decisions need to be taken now, today and tomorrow,” Mr. Sarkozy said. “This has nothing to do with ego. This has nothing to do with temper tantrums. When it comes to historic moments, you can’t circumvent them.”

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Searching for a broad international consensus in advance of a meeting of the Group of 20 countries to debate the global economic crisis, President Obama played down reports of discord Wednesday, saying that reports of international divisions had been “vastly overstated.”

But, he said at a joint news conference in London with Prime Minister Gordon Brown, the nature of the crisis demanded an integrated response.

“We can only meet this challenge together,” he said.

Read it all. I caught the joint news conference during the morning run. Fascinating to be sure–KSH.

That’s what “Market to Mother Nature” accounting is all about. It begins with the premise that the distinction between the G-20 and the Copenhagen climate change negotiations is totally artificial. They are just flip sides of the same global problem ”” how we as a world keep raising standards of living for more and more people in ways that will not, as a byproduct, have both the Market and Mother Nature producing huge amounts of toxic assets.

The old system, which has reached its financial and environmental limits, worked like this: We built more and more stores in America to sell more and more stuff, which was made in more and more Chinese factories powered by more and more coal that earned more and more dollars to buy more and more U.S. T-bills that got recycled back to America in the form of cheap credit to build more and more stores and more and more houses that gave rise to more and more Chinese factories. …

This system was a powerful engine of wealth creation and lifted millions out of poverty, but it relied upon the risks to the Market and to Mother Nature being underpriced and to profits being privatized in good times and losses socialized in bad times. This capitalist engine doesn’t need to be discarded; it needs some fixes. For starters, we need to get back to basics ”” accountable lending, prudent saving, reasonable leverage and, most important, more engineering of goods than just financial products.

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The event will be an extreme irritant for London’s commuters and traffic. But it is already remarkable in another, more promising way. The financial crisis is the first great test of globalisation. The emerging economies ”” such as China, India and Brazil ”” are crucial to resolving the crisis. It is an achievement in itself that the G20, rather than the G7, has become the focus of efforts to stabilise the global economy and reform the financial system.

Mr Brown’s plans for a “new Bretton Woods” system have generated criticism owing to their lack of detail. But it is inevitable that the summit will be richer in symbolism than substance. And to be sure, there is a virtue in the broad sweep: the world’s leaders have the opportunity to restate with intelligence and conviction the arguments for free markets, free trade, and free men and women in the face of heartfelt but fuzzy-brained protest.

It is also a reasonable aim to establish rules for the international financial system so that risks to the wider economy are reduced. Whether or not it proves equal to that task, the G20 has an important role.

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