Gordon Brown and Angela Merkel Present United Front on Global Downturn

Britain and Germany appeared to have buried their differences about how to deal with the credit crunch at a meeting between Gordon Brown and Angela Merkel in Berlin this morning, in which they pledged to work closely to tackle the downturn and demonstrated broad agreement over the measures that were needed.

The British prime minister and the German chancellor repeatedly stressed in a press conference following their breakfast meeting in the chancellery that close co-operation and international consensus were essential if the global downturn was to be tackled effectively.

Their common front appeared to end weeks of dispute which have seen accusations from Britain, supported by France and America, that Germany was being slow to introduce measures to alleviate the crisis, and Germany's dismissal of the "crass Keynesianism" and irresponsibility of Britain's approach.

Brown said he welcomed the "lead that has been taken by Germany" after it announced a second fiscal stimulus package worth ?50bn two days ago aimed at securing jobs and boosting growth. He said he expected it to be followed in the next few days by an American fiscal expansion package. He said the scale of the crisis meant it was necessary to "reinvigorate" the transatlantic alliance.

"What we can do together and particularly what we can achieve in partnership in stimulating the economy will be greater than any single country or continent can achieve on its own," he said.

The two leaders pledged to work together ahead of the G20 summit to be held in London in April, which Brown said would produce agreements that would be "significant for the world economy", including creating an "unprecedented level of transparency" in the financial sector and "new standards of surveillance for global financial institutions".

Merkel has long called for a UN-style body to oversee the world's financial markets. She said this morning: "We are in firm agreement that we need a global structure that will regulate beyond the financial services industry".

Brown said the G20 summit would look at a complete overhaul of outdated financial institutions. "The institutions that we built for the age of the 1940s, 50s and 60s are no longer adequate for the problems of 2009," he said, citing climate change, energy security, and currency and trade imbalances.

He denied the government was complacent in its attitude towards the economy following the controversial comment by Shriti Vadera, the business minister, who said yesterday that the "green shoots of recovery" were already visible on a day which saw record job losses.

"We are vigilant in every respect about the economy, never complacent," Brown said. "We've taken action on Monday on jobs, we've taken action on Tuesday to increase opportunities for young people We took action on Wednesday to improve the flow of money to the banking system, we have further announcements to make that show that in every area where there are problems that people feel in their everyday lives ? we will not stand by on the other side, we will be ready to help ? we are taking action in a co-ordinated way."

Brown praised Merkel for her "leadership" and "sense of purpose", giving her particular credit for her work on climate change which he said had been "inspirational for the rest of the world".