LINDA WERTHEIMER, host:

This is MORNING EDITION from NPR News. I'm Linda Wertheimer.

STEVE INSKEEP, host:

And I'm Steve Inskeep in the wood-paneled office of the British ambassador here in Washington. We're sitting with the British prime minister, Gordon Brown. Welcome back to MORNING EDITION.

Prime Minister GORDON BROWN (Great Britain): Yes, good morning, and I look forward to talking to you.

INSKEEP: Welcome back to the United States. He's here to meet with President Obama, and also this week address Congress.

Now, Prime Minister Brown, before coming you have laid out an ambitious sounding phrase; you've called for a global new deal. You're talking about a new economic order to deal with world economic problems. We can't go into all the details here, but I want to ask about one. You've talked about global regulation of financial institutions. What would you use to do that? What would be the mechanism?

Prime Minister BROWN: Well, this is a global problem. It needs global solutions. There is a global banking collapse that we're dealing with the consequences of in every country.

And if we could have the same standards and the same rules that we are about to apply in the United States of America and in Britain, to apply to other countries around the world, the same standards of transparency and of disclosure and of accountability, the same standards of remuneration, then I think the confidence that is needed in the banking system will be restored.

INSKEEP: Who's going to do that? The World Bank? The United Nations? Who?

Prime Minister BROWN: We've got a meeting of the G-20, which is the 20…

INSKEEP: Largest economies.

Prime Minister BROWN: …largest economies, in London in April. I think there is a general understanding, whether you talk to China or whether you talk to the European Union or whether you talk to our great friends here in America, that we need to show that the world can come together not only to have a fiscal stimulus for the world economy but also to set standards that if people are not able to meet, we would have a mechanism by which we would say, look, this is not good enough and people would lose their status in the international community.

INSKEEP: Although let me ask about that. Do you believe that the United States and Britain, given all their financial disasters, have the moral authority to turn to the rest of the world and say we're going to tell you how to change your banking systems?

Prime Minister BROWN: I believe that we, America and Britain, with other countries in Europe, have taken very swift and decisive action to deal with the problems.

If you've got a global financial system, as we have now, and banks are entangled or interlinked with banks in all parts of the world, then you need to think about how you can assure people that the savings are going to be safe, that the banks are going to do the job that we expected them; that's to lend money as well as to take deposits.

And so there's a general agreement now that we've going to be far better in a global economy dealing with the problems that arise from cross-border flows of capital, cross-border supervision that may be necessary. And I think, if anything, the American people want more than anybody else to see our banks secure and safe and able to do the job they were supposed to do in the first place.

INSKEEP: People are eagerly asking for any sign of when the corner can be turned. I'd like to know what you think is realistic. Is it realistic that in a few months this problem can be solved? Will it be years of economic trouble to solve this?

Prime Minister BROWN: Well, this is a banking crisis, so we've got to get to the roots of it and we've got to clean up the banking system. And I think most people are agreed on that. I think the level of international cooperation, what we can do together, will in one sense dictate how quickly we can come out of this downturn, because we're all affected by what happens in other countries now. And so America is losing exports because other countries are unable to buy their products. And that's happening the other way around as well.

And so if we can get trade and commerce moving again, and particularly deal with the problem of restructuring banks in countries like in Eastern Europe or in Latin America, where there are real problems, and help them do so, then I think we can move forward with some speed.

INSKEEP: But if I might, prime minister, you're meeting with President Obama, whose administration is forecasting reasonably strong economic growth by next year, and that's an important forecast that affects the American budget, the budget deficit, how many billions of dollars you have to give to banks to bail them out. It's a hugely important forecast. Do you think it is realistic that there could be strong economic growth next year?

Prime Minister BROWN: Well, I think we're about to put in perhaps the biggest fiscal stimulus that the world has ever seen. So what America does, what Britain does, what China is doing, what the other countries are doing, we've had the biggest cut in interest rates the world has probably ever seen.

And so the degree of action that has been taken by the governments of the day -and if we can follow that up with greater international cooperation over the next few months - that is going to make a big difference to our chances of recovery quickly.

INSKEEP: Meaning that it's realistic to have economic growth that's pretty strong next year?

Prime Minister BROWN: Well, I hope that we can, with international cooperation, move back to a path of growth. And I hope at the same time that we can have growth that is low carbon growth. I hope we can have growth that is growth for the future because it's based on investing in infrastructure and skills. And I think a lot of people who are looking at this downturn are looking also at the way we can create a better and stronger and more stable economy in the upturn.

INSKEEP: We're talking with British Prime Minister Gordon Brown at the British ambassador's residence in Washington. I want to remind people, prime minister, before you took your current job you were in charge of Britain's economy for a decade. You're widely regarded as an expert on this. Looking back on your time, your stewardship of Britain's economy, did you worry in those years at any point that Britain was piling up too much debt, that consumers were piling up too much debt, that corporations were borrowing too much, that too much risky lending was going on?

Prime Minister BROWN: Our corporations were certainly not borrowing too much. I think what happened after the Asian crisis, which was 10 years ago, is we all tried to find a way, when we knew that we had these huge capital flows around the world, we knew we had institutions that were linked up to other institutions in different countries, but we didn't have a way of supervising that properly. We tried to get to a better international system of supervision.

We're now in a position to do it because I think all countries now realize that that is essential. And so what you really need is a better early warning system. What you need is better rules and standards that can be adopted and can be understood to be the fair ones across the system. And what, of course, you need is governments that are prepared to take the supervisory action that is necessary for what some people call the shadow banking system that grew up and existed.

INSKEEP: I want to leave a little time to ask about Afghanistan, because as you know, President Obama is increasing the U.S. troop presence there from something over 24,000, adding 17,000 troops in the coming months and years. Britain is the second-strongest ally there with well over 8,000 troops. Britain has decided not to send very more troops. Why not?

Prime Minister BROWN: We've just actually put in more troops in Afghanistan.

INSKEEP: A few hundred, correct?

Prime Minister BROWN: Yes, yes, a few hundred. And he are undertaking a review just as President Obama is undertaking a review. I think what we're realizing is two things. First of all, we can't solve the problem of Afghanistan without looking at what's happening in Pakistan.

INSKEEP: Its neighbor.

Prime Minister BROWN: That's where the thousands of - 2,000 or so al-Qaeda terrorists are based. It used to be in Afghanistan; they're now in Pakistan. I think secondly, we're dealing with a new tactic on the part of the Taliban. It's essentially guerilla warfare that they're practicing. It's not army-to-army direct fighting so much as roadside devices and car bombs. And we've got to deal with that.

INSKEEP: Are you more troops are not necessarily the answer to this complicated problem?

Prime Minister BROWN: I'm not saying that. What I'm saying is we need to think, first of all, how we can deal with the terrorists that are located in Pakistan, which may of course have come across the border. Secondly, we've got to build stronger government in Afghanistan. So we want the Afghans to themselves -train their armies, train their police.

We need social development, economic development in Afghanistan. We need to give people prosperity that doesn't come from either the poppy crops or from being linked up to the Taliban. We need a strong central government in Afghanistan that's in a position to deliver the education and the health and the promises that have been made about a better future for the people of Afghanistan.

INSKEEP: Final question…

Prime Minister BROWN: That is, the military actions complimented by other actions.

INSKEEP: Okay. Final question. Given your concern with Pakistan, do you have confidence that Pakistan's government is a fully reliable ally in that effort?

Prime Minister BROWN: Well, I've had a number of meetings with President Zardari. I've met the prime minister, Gilani. I've met the head of the army (unintelligible) I believe we can work with them and I believe that they are determined to root out terrorism in their country. And we've got to find a way of working with them so that that can happen.

INSKEEP: Prime Minister, thanks very much.

Gordon Brown is prime minister of Britain. He's here in Washington for a series of meetings, including, of course, a meeting with President Obama. And also later this week he will address Congress.

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