Germany's Absence at Summit

An impromptu mini-summit in London on the financial crisis is being attended by Britain's Gordon Brown, France's Nicolas Sarkozy and Jose Manuel Barroso, the EU Commission President on Monday, just as stock markets around the world are rebounding.

The summit is notable for the absence of German chancellor Angela Merkel, who heads Europe's biggest economy.

The German government however denied reports that Merkel was not invited to London, after media reports surfaced saying that her European counterparts were distancing themselves from her.

Brown, Sarkozy and Barroso favour a joint EU stimulus package to lift the economy across the continent, whereas Merkel is not so enthusiastic about a European-wide plan and is perceived as going the unilateral German way.

Britain and France not ganging up against Germany

"Because it is a bilateral meeting, we never expected that the chancellor would take part," said spokesman Thomas Steg.

Over the past week or so, London and Paris each unveiled stimulus packages in the order of 25 billion Euros and are keen for Germany to do more to boost its economy than current measures to inject liquidity with 12 billion Euros in fresh money into the system.

Government sources in Berlin have said that Sarkozy's plan is similar to Germany's in terms of content, but that Britain is different due to the dominance of its financial sector and an economy that is more consumption-oriented.

Even British and French officials downplayed the symbolic significance of the meeting and insisted that Sarkozy and Brown were not ganging up against Merkel ahead of a summit that includes all EU leaders on Thursday.

However when the French president unveiled his country's stimulus plan last week, Sarkozy had said that France kept to its promises made at the G20 emergency summit in Washington last month and plans to stimulate the economies of the US, China, the EU, UK, Italy and Spain. He had noticeably left out Germany from his list.

No love lost between Sarkozy and Merkel

Even though Sarkozy and Merkel both hail from centre-right parties in their respective governments, the personal chemistry between the two leaders has been cordial at best.

Merkel is keen for Germany to retain more fiscal flexibility and prefers a more prudent wait and see approach before US President-elect Barack Obama takes office on January 20. Berlin has also expressed doubts about last week's interest rate cuts by the European Central Bank, which Merkel says goes too far. The German and French economies form the backbone of the European currency, whereas Britain still retains the pound.

Aim of summit to give coherence to European rescue plans

The London talks are due to start mid-afternoon and will focus on measures to revive the economy, according to a French source close to Sarkozy.

"It's a chance to evaluate the situation to see where we are in Europe," the source told the French news agency AFP.

The aim is to "give coherence" to different European rescue plans "so that a message of confidence can be put forward by the European Council on the 11 and 12" December, he added.

The leaders' meeting will be followed by hour-long talks with some 50 economists and business leaders including Lakshmi Mittal, boss of steelmaker ArcelorMittal, Bank of England Governor Mervyn King and the CEO of French oil giant Total, Christophe de Margerie.