Prime Minister Stephen Harper came to the defense of Canada's biggest trading partner Thursday, challenging the many critics of the U.S. Federal Reserve's plan to create $600-billion (U.S.) to buy financial assets to come up with something better.

Mr. Harper made the comment before the official start of the Group of 20 Summit in Seoul. The Fed's decision last week to resume purchasing securities in a bid to lower interest rates has become a preoccupation of many G20 leaders because quantitative easing, as the policy is called, has the effect of weakening the dollar. Officials from Brazil, China, Germany and Russia suggest this is the Fed's true aim. Mr. Harper, in his first comments on the controversy, dismissed those allegations, saying the Fed is simply doing what it can to breath life into the U.S.'s sluggish recovery.

“Under the circumstances, the quantitative easing policy is in the short term the only option available for the Federal Reserve and I'm not sure anyone else has provided any compelling argument as to what alternative policy they would pursue, at least in the short term,” Mr. Harper told reporters after a meeting with his Mexican counterpart.

Leaders assembled for a working dinner on Thursday deeply divided over currency policy and how to spread trade and investment more evenly around the globe. As controversial as U.S. monetary policy is China's resistance to allowing the value of the yuan to appreciate faster even though the country is running an outsized trade surplus. The non-elected officials responsible for writing a draft communiqué for the presidents and prime ministers were so far apart on that they couldn't even agree on what to discuss when they met on Thursday, said Kim Yoon-kyung, a spokesman for the summit's organizing committee.

The acrimony over quantitative easing, or QE, wasn't helped by Alan Greenspan, the former chairman of the Federal Reserve, who wrote in the Financial Times that his country is “pursuing a policy of currency weakening.”

Mr. Greenspan was more critical of China for running up more than $2-trillion in reserves since 2000 containing the value of the yuan. But the suggestion that the U.S. is actively trying to devalue its currency by the man once referred to as “the oracle” stung. Mr. Greenspan's comment undermined the Obama administration's contention that the Fed is simply trying to boost economic growth. “We will never seek to weaken our currency as a tool to gain competitive advantage and to grow the economy,” Treasury Secretary Timothy Geithner told CNBC in response to Mr. Greenspan's commentary.

The Seoul Summit is the fifth gathering since leaders of the G20 first gathered in Washington two years ago to fashion a co-ordinated response to the financial crisis. But the unity the G20 showed in the face of calamity is now seriously strained. The rancour over currencies risks spreading to other initiatives, including a promise made in Pittsburgh last year to ensure taxpayers are never again left on the hook to bail out banks that are “too big to fail.”

The global recession that was sparked by the crisis descended on the world with remarkable speed, making it easier to settle on a response. Now, emerging market countries such as China have completely recovered, while advanced economies such as the United States are struggling with big deficits and high unemployment rates.