The scale of the threat to the global economy and the challenge to world leaders could hardly be greater. But with three weeks to go before the crucial Group of 20 summit in London, the prospects of success for this meeting of the world's leading developed and developing countries are poor and getting poorer.

Initially, there were hopes that it would craft a new global financial system, along with new financial regulations, and an invigorated and recapitalized International Monetary Fund to help the most threatened countries. Above all, it was hoped the G20 summit would agree to a concerted international effort to revive the world economy and save the gains in wealth, trade and prosperity that globalization has secured over the past 30 years.

But officials closely involved in the preliminary discussions are gloomy over each of those goals, except possibly for recapitalizing the IMF where there is a growing consensus. The Europeans and Americans do not agree about regulations, and few still speak of a "new Bretton Woods" to redesign the world's financial system. With the World Bank now predicting the first fall of both world economic output and world trade since the 1940s, the fear now is not whether globalization can be saved, but whether the domestic political pressures for de-globalization and protection can be stopped.

The most immediate and alarming problem is that the Europeans and Americans do not seem to agree on what is needed. Larry Summers, former U.S. treasury secretary who now leads President Barack Obama's National Economic Council, wants a global agreement by all the G20 countries to pump demand into the world economy by stimulus packages and public spending.

"The right macro-economic focus for the G20 is on global demand, and the world needs more global demand," Summers told the Financial Times this week in an interview. "The old global imbalances agenda was more demand in China, less demand in America. Nobody thinks that is the right agenda now. There's no place that should be reducing its contribution to global demand right now. It is really the universal demand agenda."

China with its announcement of a $586 billion package, and the United States with the $800 billion Obama stimulus bill and now the planned $1.7 trillion budget deficit, are making heroic efforts. The Europeans, however, are doing a very great deal less, and Monday's meeting of the eurozone finance ministers made it clear they are not ready to do more, in part because they fear that rising levels of public debt may not be sustainable.

"The 16 euro area ministers agreed that recent American appeals insisting that the Europeans make an additional budgetary effort to combat the effects of the crisis was not to our liking," said Luxembourg Premier Jean-Claude Juncker, who chairs the eurozone group. "We would not want to give the impression that we were considering implementing further recovery packages. Europe and the Euro Group (of eurozone finance ministers) have done what they needed to do."

In fact, the European Union has done less than it promised. The EU Council, the powerful body in which the heads of government meet to make the big decisions, said at its summit last year the EU should collectively aim at pumping 1.5 percent of GDP into stimulus spending this year. Given their collective GDP of $16 trillion, that should amount to $240 billion.

But the Brussels-based Bruegel think tank has been monitoring the decisions of the 27 EU member states and calculates that even after Germany's latest pledge of $50 billion more in public spending, the EU as a whole will contribute this year no more than $115 billion, or less than 0.9 percent of GDP.

Only four of the EU members -- Germany, Austria, Spain and Britain -- are spending more than 1 percent of GDP.

By contrast, the United States is pumping in more than double that amount this year, some 2 percent of GDP (with much more next year), and China is spending 7 percent of its much lower GDP this year alone.

"While some questions regarding the Chinese data remain, it is nevertheless striking how China's stimulus package stands out as by far the largest as a percentage of GDP," says the Bruegel report. "There are at least two important reasons for this. First, investment makes up almost half of Chinese GDP, and since investment usually follows the economic cycle, the Chinese government is concerned that the current slowdown could lead to severe disruptions both economically and socially. Second, China has a large capacity for deficit spending given its low stock of government debt. The U.S. package, as signed by President Obama, is twice as large as the European package, occupying a middle ground between the EU and Chinese packages."

The Americans have grown accustomed to Europeans dragging their feet over strategic issues like sending troops to Afghanistan or spending serious money on defense and modernizing their military forces. But at least in the past the United States could expect Europe to play the role of an economic superpower, if only because it was in Europe's direct self-interest to do so.

There are a number of reasons for Europe's hesitance, including different levels of exposure to the housing bubble, more or less globalized banking systems, widely differing levels of importance of the "informal" economy, and so on. Some of the richer Western European states have average incomes of more than $30,000 a year, more than four times that of Bulgaria or Romania. But the rules of the single market and the EU treaties they have adopted mean that in a profound sense, they are all in the same boat. And if the EU members cannot get their act together, what hope is there for the G20?

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