Merkel "optimistic" about G20 summit

German Chancellor Angela Merkel said on Saturday she was optimistic a G20 summit Britain hosts next month would bring positive measures to tackle the global economic crisis, but was wary about more fiscal stimulus.

Merkel was speaking at a joint news conference with British Prime Minister Gordon Brown in London, while finance ministers from the G20 group of big developed and emerging economies met south of the capital to prepare for the main summit in April.

Officials at the G20 finance ministers' meeting have sought to play down reports that there is a rift between the United States, which favours more global fiscal stimulus, and European countries favouring tougher financial regulation.

Brown, who praised Merkel's leadership, said they both agreed on the need for tougher regulation of hedge funds, and were confident they would secure American backing.

"We are getting agreement on that and I believe that ... the Americans are ready to support us in these changes we are bringing about. You are going to see a massive change in the supervisory system," he said.

Merkel, one of Brown's closer European allies, joked about enjoying unseasonally good weather when she walked with him near his official country residence earlier in the day, and said preparations for the April G20 summit were going well.

"This summit is going to give very positive signals indeed, it's going to be a very positive message to the rest of the world that we want to promote growth globally," Merkel said.

"I am very optimistic that we can come up with good results."

Merkel said the summit did not necessarily need to go over the details of national stimulus packages already put in place, and that Germany had already taken "gigantic" steps to stimulate its economy, the largest in Europe.

"Germany has by now adopted a fiscal stimulus package to the tune of 4.2 percent of the GDP for 2009/2010. That means we're in the vanguard, actually, in the European Union," she said.

She noted that Germans did not suffer the same problems with home loan and credit card debt that Americans did, and that it was time to wait for her fiscal stimulus package to take effect and reassure markets on fiscal discipline.

"We must return to a solid, sustainable fiscal policy after the crisis. So we have got to signal to markets that on the one hand we are tackling the crisis decisively and that, on the other hand, we will permanently avoid excessive global imbalances."