The European Union will support maintaining policies that poured trillions of dollars into economies and call on a G20 meeting for progress on trade talks to help boost a recovery, a draft policy document said.

Leaders are due to discuss coordinating the withdrawal of economic stimulus packages, bank regulation, climate change and trade at a meeting of the G20 leading industrialized and developing economies in Pittsburgh on September 24-25.

The head of France's market watchdog Jean-Pierre Jouyet said on Wednesday bank bonuses would be the hardest subject to agree on due to differences between Europe and the United States. But others say trade and climate talks could prove equally as hard.

A draft document prepared for a meeting of the European Union's 27 leaders showed that they wanted to keep so-called stimulus packages in place to spur the fragile economic recovery, which has been far from uniform across the bloc.

The G20 should reaffirm its determination to continue implementing coordinated policy measures in order to develop the basis for sustainable growth and to avoid a repetition of the present financial crisis, said the EU document obtained by Reuters.

Efforts must be maintained until recovery is secured.

The EU heads will also call for giving the International Monetary Fund a key role in global policy coordination and commit to provide the IMF with a total of 125 billion euros in extra funds.

Germany and France have already moved out of recession, but the UK, Spain and Ireland have trailed, with Ireland struggling to jettison billions of euros in risky loans at its banks.

Some economists fear that without the stimulus programs, the fragile recovery will collapse, with consumers reluctant to spend because of rising unemployment rates.

The World Trade Organization has urged for a renewed pledge by countries to respect free trade, saying protectionist policies could hold back the recovery.

The European Union said it also wanted to see progress on the Doha round of trade negotiations, which stalled last year.

The G20 should ... continue to press for progress in trade liberalization, including with regard to a global, ambitious and balanced conclusion of the Doha negotiations in 2010, as agreed at (the) G8 summit in l'Aquila, the document said.

In this respect, a realistic and ambitious roadmap should be agreed.

The EU has also joined the United States in calling for action to improve transparency in oil markets, the draft shows.

The G20 should commit to improving energy security by increasing oil market transparency and contain speculation, it said.

Such action would include reporting comprehensive data on domestic oil markets and taking steps to oversee the over-the--counter markets so that regulators have a more complete view into the actions of market participants, it said.

ANGER OVER BANK BONUSES

But with the resumption of bonuses at some banks prompting resentment among many people who have suffered during the recession, trade issues could be overshadowed.

On Wednesday, a group representing 168 million workers around the world criticized banks for awarding bonuses worth more than 20 percent of the taxpayer money spent bailing them out.

The seeds of another crisis are already being sown, and political leaders need to do much more than just condemn this kind of behavior, Guy Ryder, head of the International Trade Union Confederation, said in a statement.

It also called on the G20 to do more to prevent job losses, which the OECD said could effect as many as 25 million people in the OECD alone between the end of 2007 and an expected unemployment peak in 2010.

Jean-Pierre Jouyet, head of France's market watchdog, told French television there was broad agreement on most of the regulatory themes to be discussed at the G20 meeting.

But U.S. opposition to Europe's push for caps on bonuses would make it the toughest subject to agree on, said Jouyet, who attended a meeting of the Financial Stability Board (FSB) which comprises G20 central bankers and regulators on Tuesday.

The FSB said on Tuesday banks with low levels of capital would not be able to offer large bonuses under guidelines the G20 is due to discuss.

There is a difference between Europe and the United States on the bonuses. It's the point which today is the most difficult to resolve, said Jouyet, who heads France's regulator, the AMF.

On the other points ... everybody realizes we need to reorganize the market, recapitalize the banks, that there is a need for better financing of the economy.

(Writing by Elizabeth Piper; Editing by Andy Bruce)

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