FORTUNE -- President Obama wants to slow Europe's headlong rush to austerity. But right now he looks like little more than a speed bump for the cutback crowd.
Obama has sought to use the upcoming meeting of the Group of 20 global finance ministers in Canada this weekend as a rallying cry for more fiscal stimulus. He argues that cutting government spending now risks undermining a fragile recovery in debt-soaked Western economies.
"We worked exceptionally hard to restore growth; we cannot let it falter or lose strength now," Obama said in a letter to G-20 leaders last Friday. "This means that we should reaffirm our unity of purpose to provide the policy support necessary to keep economic growth strong."
But the G-20's unity of purpose isn't what it was last year, when the global financial crisis galvanized the group to prop up the world's financial system.
Since Obama issued his call to focus on growth, German Chancellor Angela Merkel called budget cuts "urgently necessary," and European Central Bank President Jean-Claude Trichet said stronger public finances are part of a "policy which we would call confidence-building."
In the most striking contrast, the United Kingdom on Tuesday unveiled a budget that will slash real spending in many government departments by 25% over four years. Katherine Smith of economic research firm IHS Global Insight said the cuts were "truly eye-watering."
The case for cutting now is hardly ironclad. But after two years of costly government bailouts of the financial sector, the case for still more taxpayer largesse is not one many voters are eager to hear.
"Obama has been having difficulties selling that story domestically," said Stewart M. Patrick, a senior fellow at the Council on Foreign Relations in Washington. "Europe is very inward looking right now, and there are some large differences in how they see this issue."
Patrick said he expects the G-20, which comprises the leaders of 19 countries and the European Union, to issue a communique after the meeting that goes some way to "papering over the differences."
But he doesn't expect Obama to sway European leaders, despite widespread skepticism about where Europe's chosen path will lead it.
"Ultimately, any crisis of confidence in the ability of the European economy to sustain its debt reflects a lack of confidence in its ability to grow again," wrote Domenico Lombardi of the Brookings Institution, a think tank in Washington, last week.
Bank taxes. At the G-20's last meeting, earlier this month in Korea, nations including Brazil, Canada and Japan scotched plans to impose a global bank tax, noting that their banks didn't require government aid in 2008.
But the G-20 said the financial sector "should make a fair and substantial contribution towards paying for any burdens associated with government interventions."
Accordingly, the bank tax is very much alive in the U.S. and other countries hit by the meltdown. The U.K. said this week that it, Germany and France are moving ahead with their own bank-tax plans.
The Obama administration proposed a tax on bank liabilities in January, in a bid to raise $90 billion to pay for past bailouts.
Bank regulation. As the U.S. financial reform push enters its late stages, policymakers around the globe are trying to coordinate their approaches to bank oversight and planning to strengthen rules governing how much money financial institutions must hold against future losses.
"We need to reach agreement internationally on reducing leverage and raising capital requirements, improving both the quantity and quality of capital," Treasury Secretary Tim Geithner and White House economic czar Larry Summers wrote in an op-ed in The Wall Street Journal Wednesday.
China. The value of the yuan was set to be the headline topic of debate until the People's Bank of China spoiled the bash. The PBoC said Saturday it would allow the currency to float more freely within a preset band. Commentators applauded the savvy politics of the move, which is expected to have little immediate economic impact.
That said, China's management of its trade relationships remains a touchy issue in the United States and Europe, which are struggling with high unemployment.
Many commentators believe trade tensions will only increase in the second half of 2010 as U.S. growth slows and excitement about China's revaluation move fades.
Global economic imbalances. Perhaps the most intractable problem facing the G-20 is the need to change economic policies not only in deficit nations but also in those running big surpluses.
It is easy to counsel belt-tightening after a long run of profligacy, as seen in the United States. But what to do about Germany, which has been running a large trade surplus yet intends to cut its spending anyway?
"There is a need to move toward rebalancing," said Patrick. "But every country has different domestic political demands, and that is what drives decision making."
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