Montreal G20 meeting greeted by angry protesters

Police in riot gear charge into a crowd of protesters

MONTREAL, Canada (Reuters) -- Police in riot gear charged on horseback and used tear gas to drive back demonstrators at an international financial meeting in Montreal Monday in the latest angry protest against global capitalism.

The demonstrators, waving red and black anarchist flags and hurling stones and other missiles, were protesting against a meeting of the little-known Group of 20 countries, a newly minted gathering of both rich and poor nations that aims to strengthen a fragile world financial system.

"Any organization that includes the World Bank and the International Monetary Fund is not out to help poor countries," said David Bernans, a researcher at Concordia University's Students' Union and one of some 500 protesters.

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The protesters, whose actions followed anti-globalization rallies in Seattle, Washington, D.C., and Prague, had earlier linked arms in front of the luxury hotel where the G20 will meet on Tuesday.

They hurled paint at the building and left banners at its locked doors as they fled from the tear gas and from hefty doses of eye-stinging pepper spray. Police said they had made a number of arrests.

The G20 comprises the Group of Seven -- Britain, France, Canada, Germany, Italy, Japan and the United States -- as well as Argentina, Australia, Brazil, China, India, Indonesia, South Korea, Mexico, Russia, Saudi Arabia, South Africa and Turkey. The IMF and World Bank are also members, as are the European Union and the European Central Bank.

Ironically the group was set up in 1999 in an effort to give poor countries a louder voice in international financial institutions.

"The G20 can make a significant difference," South African Finance Minister Trevor Manuel told a conference on Monday, a day before the official start of the meeting.

The session is scheduled to focus on ways to ensure the problems that brought down Asia's one-time tiger economies do not occur again.

But even before the meeting started, it was clear the global policy makers who will participate did not quite see eye to eye on how best to proceed.

Bank of Canada Governor Gordon Thiessen, speaking at a conference before the G20, said there might be times to push for debt standstills -- which would let countries halt debt payments temporarily if they face a short-term cash crunch.

But Mexican central bank chief Guillermo Ortiz questioned the logic of that, and said he liked the case-by-case approach used during the world financial crisis of 1997-99, which started in Thailand and spread relentlessly around the world.

A youth throws a paint bomb against a window during protests

"The approaches were taken by the international financial community in the Asian and Russian and Brazilian crisis...were generally appropriate," said Ortiz.

The two-day G20 meeting starts against the backdrop of high oil prices and a fragile European single currency.

The continental European G7 countries, by and large, want to see a rule-based approach to crisis resolution. The United States says each set of problems should be treated on its merits and responsibility rests with the country affected.

"It is not realistic to attempt to design rules or guidelines to provide a meaningful guide for action in circumstances this varied, much less in the uncertain future," U.S. Deputy Treasury Secretary Timothy Geithner said.

"Fundamentally, it is the government of the crisis country that must commit to seeking to resolve its financial problems in a way that lays the basis for its long-run return to financial health and its re-integration into global markets."

Markets, nervous at costly oil and a faltering euro, appear to hope ministers and central bankers will come up with a clear sign that market-calming action is ahead.

But German Deputy Finance Minister Caio Koch-Weser said the group was unlikely to make an official statement on support for the beleaguered euro. Traders said a lack of anything more than verbal support could put the currency under new pressure.

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