London - German Chancellor Angela Merkel and French President Nicolas Sarkozy threw down the gauntlet Wednesday and challenged the Group of 20 (G20) big economic powers to agree to tough new reforms for global financial markets.

"The foundations for the new financial architecture is now," said an unusually combative Merkel at a joint press conference with Sarkozy ahead of Thursday's summit in London of the leading industrialized nations and emerging economies.

"We cannot afford to be vague," said Merkel, who has spearheaded European resistance to throwing more money at the global recession, arguing that it will take some time for the measures also introduced to take effect and that the focus should now be on financial reform.

The Chancellor told Merkel that the world could not afford to wait for a third G20 summit to come up with new rules to govern financial markets.

The London summit is only the second time that the G20 leaders have met in the organization's decade long history. They last met in Washington in November.

But the French President also appeared to back away from previous remarks that he would walk out on the summit if it failed to agree to a new tough set of financial market reforms.

He told reporters that after having just arrived it would be pity if he left now.

Sarkozy told reporters at the press conference that the G20 "needed to lay down rules for the 21st century."

Both Sarkozy and Merkel have campaigned for beefing up global financial market supervision and closing the gaps in the regulatory net to take in areas such as hedge funds and tax havens.

The London summit, said Sarkozy, represented "a real chance of making progressing on market reforms."

"We don't have to set a minimum standard," said the French leader. In particular, Merkel warned that steps needed to be taken now to head off the threat of fresh crises in the future.

"A crisis should not be allowed to repeat itself," Merkel said. "Regulation is in everyone's interests." (dpa)