G20 not calling for new deficit spending - Germany

BERLIN (Reuters) - The Group of 20 economic powers is not demanding new stimulus measures and Germany will not be attacked for its planned austerity drive at a G20 summit this weekend, senior German government officials said on Tuesday.

Speaking on condition of anonymity, one official said progress on a banking charge was a key test of whether the G20 can find a joint position on important issues, despite the fact G20 finance ministers had decided to give up on a common levy.

Talks at the G20 summit in Toronto were likely to focus on how to balance the need to sustain growth with efforts to pare back public debt, one of the officials said in Berlin.

Germany, Europe's largest economy, has defended government plans to pursue savings measures of around 80 billion euros in the next four years after U.S. President Barack Obama preached patience in clamping down on public spending.

However, Obama had not pressed Chancellor Angela Merkel to ramp up stimulus spending in a recent telephone call, an official said, adding that the two had decided to explore what structural measures could be adopted to strengthen growth.

Differences between the United States and Germany were smaller than was generally assumed, he added.

Proposals on how to coordinate a policy response would be prepared under the auspices of the International Monetary Fund (IMF) for a G20 summit in Seoul in November, an official said.

The IMF backed Germany's policies, one official said.

"The exit from economic stimulus measures in 2011 is recognised as correct," the official said, adding that he did not expect Germany to come under notable pressure over its consolidation plans during the Toronto G20 summit.

Germany needed to set an example to the rest of the European Union on budgetary discipline, the official said.

One official said the G20 format, which has increasingly taken precedence over the G8 group as the main forum for international economic policy debate, was proving harder to reach decisions in due to its larger membership.

"The question of the banking charge for example is going to be a test point from which it'll become clear whether the G20 is in a position to formulate interests jointly or whether it splits apart into two camps," he said.

These would consist of those who said these kinds of policy initiatives were "not their problem" and those who felt that such issues played a key role in their agenda, he added.

(Reporting by Gernot Heller, writing by Dave Graham, editing by Stephen Nisbet)