German Finance Minister Wolfgang Schaeuble has defended Europe's strong presence at the G20, arguing that it is not over-represented despite accounting for barely 20% of the global economy.

Finance ministers from the world's major economies meet in Sydney this weekend.

The winding back of the US Federal Reserve's monetary stimulus policy as well as ways to boost growth and create jobs are set to take centre stage.

The balance between the old and new worlds is one of the underlying sources of tension at the forum. 

The likes of Brazil, Russia, India, China and South Africa are emerging as economic powers, while euro zone economies - including France, Germany, Italy, as well as the European Union - have struggled with a debt crisis. 

Despite this, Wolfgang Schaeuble said the balance remained fair.

"I do not share the view that Europe is over-represented in the G20," the German, arguably the most powerful finance minister in Europe, told the Australian Financial Review 

"According to GDP, trade and other economic figures, the EU is one of the largest and most innovative regions of the world," he said.

Schaeuble has played a crucial role in the euro zone debt crisis, but has also supported the European Central Bank, including its bond-buying programme, similar to the US Federal Reserve's quantitative easing.

He implied to the newspaper that it was too soon to start winding back those policies before the necessary reforms were in place.

"In recent years we have witnessed very expansionary monetary policies around the world," he said.

"We have to keep in mind that excessive liquidity on the global market creates new challenges and risks. We all have to ensure through appropriate reforms that our economies are strong enough to face the necessary normalisation of monetary policy," he added. 

IMF, Britain warn emerging economies ahead of G20

Meanwhile, IMF chief Christine Lagarde and British finance minister George Osborne today demanded emerging economies get their own houses in order, after some attacked US monetary policy in the run-up to G20 talks this weekend.

While Ms Lagarde also cautioned the US Federal Reserve to be "mindful" of the impact of its stimulus exit on major developing players, Osborne urged emerging markets to refrain from "finger-pointing and distractions" at the Sydney meeting of G20 finance ministers and central bankers.

Countries including Argentina, India, Russia, South Africa and Turkey have suffered sharp losses to their currencies as a by-product of the Fed's "taper" - the ending of a huge stimulus programme that is seeing capital flows switch abruptly away from the developing world.

Lagarde said "just a hint of tapering" in May last year had sent ripples through the markets and the International Monetary Fund had asked "the US authorities, particularly the Fed, be mindful of what's happening elsewhere when you do what you have announced". 

"Don't go too fast and explain what you are doing," the IMF chief said in a public question-and-answer session recorded for ABC television in Sydney.

But she said a "mind the shop at home" message also applied to the developing economies.

"In other words, emerging market economies, you need to look after your various equilibriums. You need to look at your fiscal policy, you need to look at your monetary policy, you need to have the house in order to resist the volatility that can be induced from the tapering of the US Fed, in particular, at the moment," she said.

Lagarde's remarks were echoed by Britain's chancellor of the exchequer, who said it was "neither accurate nor useful" to blame Western monetary policy for shaky currencies or high deficits in emerging markets.

"The underlying causes are domestic fragility in those countries, often built up over a long period of time - and that is why some emerging markets have been much more affected than others," Osborne, who heads to Sydney on Friday, said in a speech to business leaders in Hong Kong.

"We all need to get our houses in order," he added.

Osborne backed the agenda laid out by the G20's Australian presidency for what he called "comprehensive and ambitious national reform agendas" to address fiscal policy, financial regulation and structural blockages. 

That programme is backed by the IMF, but Lagarde said G20 central banks should also signal their intentions clearly given the world's economic interdependence.

"There has to be enough cooperation between central bankers so that they are mindful of what the consequences will be, not just at home where they do the tapering, but elsewhere in the world where we have seen some volatility," she said.