Spend, spend, spend, says Barack Obama and Gordon Brown. The leaders of the UK and the US wanst the G20 leaders to agree to a $2tn fiscal stimulus package for the failing world economy. Nicolas Sarkozy and Angela Merkel will not agree to this, insisting that tighter financial regulations are needed, not more spending.

France and Germany have drawn battle lines. They are demanding stricter banking regulations, which are to include executive bonuses, hedge funds and offshore tax havens. These points are a ‘red line’ for the two countries, and they stand united in their rejection of the US suggestions of a further financial stimulus package.

Speaking in a joint press conference, Sarkozy said that ‘France and Germany will speak with a single voice. Of course we have to make compromises, but compromise has to be engaged in by all regions of the world, especially as the crisis didn’t actually spontaneously erupt in Europe, did it?’ Sarkozy insisted he was not pointing the finger of blame, but it is not hard to read between the lines.

So the battle has been begun. A $2tn stimulus package, or stricter regulations for the sector that, largely, is responsible for the mess we find ourselves in? My vote goes to Sarkozy and Merkel, although my hopes aren’t high.