"In the wake of the financial crisis, voices from the left and right are equating the free enterprise system with greed and exploitation and failure," said the US leader in a speech on Friday (14 November) at the Federal Hall National Memorial.

He conceded that there had been failures, but the blame for these should be pinned on borrowers, financial firms and regulators, not capitalism.

"But the crisis was not a failure of the free market system," he said.

"And the answer is not to try to reinvent that system. It is to fix the problems we face, make the reforms we need, and move forward with the free market principles that have delivered prosperity and hope to people all across the globe."

Mr Barroso, himself a conservative, said that the US has had to catch up with the European lead on all major global issues and now the US is behind on what is necessary to fix the world economy.

"When our American friends now are ready to embrace a real commitment to fight climate change, this is exactly what we are been saying and promoting for some time. When our American partners are saying they want to engage more in a multilateral world, this is exactly what the EU has been saying and promoting for some time. When our American partners now are saying they should put some rules in a financially unpredictable, sometimes unregulated market, this is exactly what the EU has been supporting for some time," he told a European Network of Foundations conference on democracy promotion in Brussels today.

"When our American friends now are saying that they should find some ways of promoting some public tools, some public systems, in terms of social security, public education, this is exactly what we Europeans have been doing at least since the end of the Second World War, with the development of our social market economy," he said.

Global governance

European political parties, businesses, and NGOs too have all laid out what they hope to see agreed to.

The national chambers of commerce from each of the G20 countries issued a joint declaration calling on world leaders to agree to strengthened national and international supervisory structures and improve the quality of regulatory standards, but warned governments against raising tariffs and protectionism.

"The World Trade Organisation should be taken as a positive example of global governance," the 20 chambers said in a statement.

Meanwhile, the Socialist grouping in the European Parliament on Thursday issued a five-point plan from Manchester where their MEPs had been having a strategising pow-wow, for a rebuilding of the world financial system and how to boost the economy.

Their "Manchester Declaration", is a largely Keynesian document, calling for a European green investment package to put money in people's pockets and make the shift to a low-carbon economy, targetting in particular vulnerable households and small businesses.

The left-of-centre MEPs call for much greater levels of intergovernmental co-ordination and public spending.

"The European Union has a key role to play in raising and channelling funds. There should be no taboo," said French Socialist MEP Pervenche Berès, chair of the European Parliament's economic and monetary affairs committee. "The member states should discuss the possibility of the EU issuing Eurobonds to invest in European projects."

Priming the global pump

UK premier Gordon Brown, who is likely to play a prominent role in the G20 discusions, having been the architect of the bail-out packages adopted in part or in whole by other EU capitals that saved their banks from a complete credit crunch.

However, despite his also being a member of the Socialist political family, he is expected at the summit to emphasise the need for co-ordinated global tax cuts to prime the global economic pump, although he also supports government spending increases.

"We need to agree on the importance of co-ordination of monetary and fiscal policy," he said before heading to Washington.

"There is a need for urgency. By acting now, we can stimulate growth in all our economies. The cost of inaction will be far greater than the cost of any action."

The Labour prime minister has also repeatedly warned against new "over-regulation" in response to the crisis. Nevertheless, Mr Brown is also pushing for international oversight of the world's top 30 banks by a college of supervisors.

In a curious twist of fate, French President Sarkozy, who, being of the conservative UMP party, has been perhaps the most dirigiste of EU leaders in the solutions he has embraced both at the European level and what he hopes to see the G20 endorse.

Mr Sarkozy, who currently chairs the EU's six-month rotating presidency, will argue for the development of cross-border regulation of financial institution lending practices and investment decisions.

On Thursday he also used the opportunity of the lead-up to the summit to deliver an obituary for the US dollar as a world currency.

"I am leaving tomorrow for Washington to explain that the dollar - which after the Second World War under Bretton Woods was the only currency in the world - can no longer claim to be the only currency in the world. What was true in 1945 cannot be true today," he said.

While Germany put up one of the main blocks to French plans for the development of a common European stimulus package at a summit of EU leaders last week, Chancellor Angela Merkel supports Mr Sarkozy's wish to see regulation of hedge funds and an end to excessive remuneration for bank executives.

However, despite their differences, the EU leaders head to Washington united on a plan of action they are to take to the meeting that would see greater transparency of financial transactions through revised accounting standards, the construction of an early warning system to tackle risks and a central role for the International Monetary Fund (IMF) "in a more efficient financial architecture."

Many aspects of the European plan are likely to meet resistance from President Bush, who remains unconvinced that deregulation of financial markets had any role to play in the crash.

Thus while Brussels is impatient that action be taken urgently to deal with the crisis, in many ways does not expect much from this first summit, and the French EU presidency has called for a second G20 summit to be held next February in order to involve the Democractic president-elect, Barack Obama, who will only send former Clinton Administration secretary of state Madeleine Albright and and former Iowa Congressman Jim Leach to the Washington meeting.

G20 undemocratic, say NGOs

Development NGOs nevertheless believe that the transatlantic differences are largely superficial, as all G20 leaders, from centre-left to centre-right, have long been convinced of the need for ever greater market liberalisation, if not all to the same degree.

A coalition of 630 civil society organisations has criticised the meeting as undemocratic as 170 countries have not been invited even though the decisions reached by the G20 affect everyone. The groups are demanding that future global summits involved all goverments and that the United Nations be the convener, not the United States. They also want to see the engagement of citizens' groups and social movements and full transparency during all discussions.

They are particularly worried about giving the World Bank and the International Monetary Fund new powers.

"The policies of northern governments, the World Bank and the International Monetary Fund pursued for the past thirty years have failed spectacularly," said Vitalis Meja with Afrodad.

"And now, the response is to bring 20 governments to DC for a new ‘Washington Consensus'."

Friends of the Earth and the Jubilee Debt campaign criticised the positions of all the leaders heading into the summit.

"While those that created the crisis have been bailed out (bonus intact) with unprecedented sums of taxpayer money, the poor in developed and developing nations have received nothing," they said in a statement.

"Let's call time on global greed," they continued. "The same systems that create poverty here – unfair trade rules and tax systems, debt burdens, privatisation and attacks on welfare spending – also create poverty in the developing world."