Boosting economy to top G20 talks

Finance officials from the Group of 20 richest nations are set to outline a commitment to boosting the global economy when they meet in London later.

While there is expected to be consensus over continuing to spend, there is some friction over the pace of spending and when to scale down stimulus efforts.

And a European proposal to curb bankers' bonuses may face opposition from the US.

A full G20 meeting takes place in Pittsburgh later this month.

Early exit warnings

The head of the International Monetary Fund (IMF), Dominique Strauss-Kahn, has said the G20 must proceed cautiously.

With Japan, France and Germany officially out of recession, minds are turning to co-ordinating the withdrawal of billions of aid and stimulus measures that were injected into countries by their governments over the past year.

And finance ministers and central bankers are set to co-ordinate plans for the eventual tapering off of government support.

But Mr Strauss-Kahn warned leaders should not unwind stimulus measures too soon.

"I see a real danger that policy makers may jeopardise the recovery by exiting from crisis measures too soon. Having said this, the time is right for policy makers to formulate their exit strategies," he told a Bundesbank conference in Berlin.

Andrew Walker, BBC World Service economics correspondent, says Mr Strauss-Kahn's remarks reflect the growing body of evidence that points towards some degree of recovery taking hold.

Joint letter

The issue of bankers' bonuses is also set to be prominent at the finance ministers' meeting.

The leaders of the UK, France and Germany have agreed to explore ways of limiting bonuses at banks to prevent future financial meltdowns, saying banks could not go on as if the crisis never happened.

UK Prime Minister Gordon Brown, French President Nicolas Sarkozy and German Chancellor Angela Merkel made the comments in a joint letter, released on Thursday.

The statement is a sign of unity on bank bonuses, after mixed signals on the European Union's willingness to act on the issue.

Darling: 'Bank bonuses should be earned'

UK Chancellor Alistair Darling told the CBI in Scotland that bonuses were not a problem if they were "deserved for long term success or hard work" but added "a bonus shouldn't be guaranteed, it should be earned".

He echoed the view that nations must work together, saying international co-operation was needed to "prevent banks playing one country off against another".

Call for EU meeting

Other financial reforms are up for discussion, including the US proposal for an international agreement on forcing banks to increase their capital reserves to help prevent another financial crisis.

Meanwhile, Sweden, which holds the rotating European Union presidency, has called for an extra informal meeting of EU leaders ahead of the G20 summit in Pittsburgh.

It wants to discuss the overall economic situation, financial regulation, as well as governance of the IMF and energy efficiency.

"All these questions and proposals needs to be discussed among EU Heads of State and Government before Pittsburgh, so that the EU can have a common and strong position at the G20 summit and speak with one voice," Swedish Prime Minister Fredrik Reinfeldt said in a statement.