Finance summit

Speaking in Berlin ahead of her departure on Thursday, Merkel said it was crucial for the international community to learn from the mistakes that led to the global economic crisis. She worried that leaders could lose their momentum in pushing for financial reforms.

"That cannot be allowed to happen," she said, and warned delegates at the Pittsburgh summit not to sidetrack away from the main issue of finding ways to stabilize financial markets.

Leaders from the world's 20 major economies are expected to arrive in the US city on Thursday evening, where they will be invited to join US President Barack Obama for a reception and a working dinner.

Business proper will not get underway until Friday morning, when the heads of state and government will discuss what measures they can put in place in order to avoid a repeat of the financial downturn that took hold of the world last year.

Capping bankers' bonuses

Obama, for whom the G-20 summit is his first as host, is under pressure to show that his administration is serious about making reforms to its financial system. The EU, and France and Germany in particular, want to see a lid put on bankers' pay packets.

Merkel said politicians should be brave enough to take steps that the big banks wouldn't welcome.

French President Nicolas Sarkozy has threatened to walk out of the Pittsburgh talks if no agreement is reached on curbing bank executives' bonuses.

"We have waited too long to remedy excesses in finance," he said. "And we now know what disasters these excesses can cause."

The executive arm of the European Union, the Commission, has set out plans for the creation of a network of finacial watchdogs to be presented during the two days of talks.

The cost of reducing emissions

Leaders are also expected to turn their attention to the financial aspect of slowing down global warming. Western nations want emerging economies to commit to a reduction plan, but they are pressing richer countries for cash handouts in exchange.

The UN annual meeting in New York addressed the issue of climate on Tuesday, but Merkel said she was not happy with the outcome.

"There has been progress, in particular from the Chinese and the Japanese side," she told reporters in the German capital. "But I have to say that when I consider what still has to be achieved before Copenhagen, we cannot be happy."

The aim of the UN summit is to thrash out a new global climate agreement to replace the Kyoto protocol which expires in 2012.

tkw/AP/dpa/Reuters
Editor: Trinity Hartman