WASHINGTON (AFP) – A crisis summit of the world’s 20 largest economies were meeting here on Saturday to outline steps to stimulate flagging global growth and prevent new financial upheaval, leaders said.

President George W. Bush, the lame-duck U.S. leader hosting the emergency talks of the Group of 20 nations, warned at the summit’s start against a relapse into trade protectionism as recession stalks global powers.
Following what he called a “frank discussion” among the leaders over dinner on Friday, Bush told reporters, “One of the dangers during a crisis such as this is that people would start implementing protectionist policies.
“I am pleased that we’re discussing a way forward to make sure that such a crisis is unlikely to occur again. And I am pleased that the leaders reaffirmed the principles behind open markets and free trade,” he said.
“Obviously, you know, this crisis has not ended. There’s some progress being made, but there’s still a lot of more work to be done.”
German Chancellor Angela Merkel, whose country has already slipped into recession, said, “The financial summit will adopt an action plan to demonstrate that the community of nations has the capacity to act.”
“There exists here a major common willingness to reassure that such a crisis will not be repeated and to revive the world economy as quickly as possible,” Merkel told reporters in her hotel before leaving for the summit.
French officials said the G20 leaders, whose countries represent 85 percent of the world economy, were to commit in a communiqué to three principles: stimulus efforts, reform of financial regulation and global governance changes.
Few specifics on the reforms were expected at this stage, a high-ranking official with French President Nicolas Sarkozy said, but an action plan with deadlines would be agreed with work to culminate on March 31.
The G20 , which includes the major industrialized nations as well as emerging giants Brazil, China, India and Russia, has been locked in debate about what caused the crisis let alone how to escape from it.
While Bush wants a limited tinkering with global financial rules, and no new trade barriers, Sarkozy has declared that “laissez-faire capitalism is over” as banks crippled by toxic mortgage assets are forced to turn to government aid.
“And yet, as we act in concert with other nations, we must also act immediately here at home to address America’s own economic crisis,” he said, calling for new stimulus spending following a package adopted by China.
A commitment to coordinate economic stimulus plans was seen as one possibility at the summit, with governments synchronizing tax and spending initiatives to boost flagging confidence among investors and consumers.
The deputy chairman of India’s Planning Commission, Montek Singh Ahluwalia, said late Friday he was “reasonably hopeful” that the leaders would endorse a “coordinated signal for a fiscal stimulus.”
The global economic climate worsened as the leaders convened.
Friday brought news that the 15 eurozone nations were now gripped by recession after two quarters of economic contraction, and U.S. retail sales tumbled a record 2.8 percent in October as worried consumers hunkered down.
The International Monetary Fund and the Financial Stability Forum said on Friday they would cooperate to provide an “early-warning system” in an effort to prevent new financial crises.