Persuading Europe, the United States and China to accept International Monetary Fund advice on economic polices may be difficult, European Central Bank President Jean-Claude Trichet said on Monday.

The United States wants a discussion of a broad framework to solve the world's economic imbalances at a summit of G20 leaders in Pittsburgh on Thursday and Friday.

The IMF would be charged with sketching out a plan and then checking whether each country was making progress.

But in the past many countries have ignored advice dished out in regular reviews by the IMF.

G7 sources told Reuters on Monday there was a renewed determination to act to stem the global imbalances because the crisis had underlined the interconnectedness of the financial system and how joint action could be more effective.

Trichet said the G20 had made progress on reforms to make the financial system more stable after the crisis.

But the most difficult question is still open: Europe, America, China, are they ready to modify their macroeconomic policies in the future -- by following the advice of the IMF and under pressure from their peers, for the common good, and world economic stability? he said in French newspaper, Le Monde.

The discussion would aim to fix a growth model that has been driven by manufacturing powers such as China exporting goods to satisfy U.S. shoppers, leading to a trade deficit in the United States and a surplus and huge currency reserves in China.

This model no longer works because consumers in the United States and other countries have seen their budgets and credit cut by the financial crisis and rising unemployment.

We can't go back to the era where the Chinese or the Germans or other countries just are selling everything to us, we're taking out a bunch of credit card debt or home equity loans, but we're not selling anything to them, U.S. President Barack Obama said in an interview with CNN television on Sunday.

BROKEN DOWN

The longer-term forecasts of the IMF are for relatively weak growth because the motors of growth are broken down, a French official said on Friday.

We need to find a new method of growth.

Economists say U.S. consumers must save more, China must encourage more shopping sprees at home and Europe must push through structural changes to unleash faster economic growth.

However, officials have said several countries are reluctant to open talks on an issue that would also pave the way for a discussion on imbalances between exchange rates including a renewed push for China to free up its currency regime.

The G20 leaders will also try to work out their differences on reforms to financial regulation aimed at preventing the kind of risk-taking that helped create the crisis.

Europe is pushing for tougher regulation including strict rules to limit bonuses, a harmonization of accounting rules, and adoption of the Basel II capital standards.

Every financial market product, every institution, and every financial marketplace should be subject to regulation, German Chancellor Angela Merkel said on Monday after a meeting to prepare for the summit.

She said she did not expect to agree a Tobin tax on financial transactions at the summit.

The United States is keen to show Europe that it is also taking steps to rein in excesses in financial markets.

But the pace of regulatory reform has been slow, held back by opposition from a powerful banking lobby and President Barack Obama's focus on healthcare reform.

There are also differences within European countries over how far financial reforms should go. France and Germany have been pushing a tough line on regulation while Britain, mindful of the interests of the City, has resisted the toughest limits on bonuses.

Those who think that because the situation is getting back to normal, we can do without deep reforms, are totally wrong, Trichet said.

(Additional reporting by Paul Carrel and Brian Rohan in Berlin and Lesley Wroughton in Washington; editing by Stephen Nisbet)

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