Tags: economy

Bush, G7 Finance Ministers to Hold Crisis Talks

Thursday, 09 Oct 2008 04:32 PM

Promising "we'll get through this," US President George W. Bush on Thursday scheduled weekend global economic crisis talks at the White House with finance ministers from major wealthy democracies.

"Today the economy, obviously, is going through a very tough stretch," he said at an event to honor hispanic Americans. "I'm confident in our economy's long-term prospects. We'll get through this deal."

The White House announced Bush would host finance ministers from the Group of Seven (G7) major industrialized democracies, as well as the heads of the International Monetary Fund and the World Bank on Saturday.

At a meeting with Slovak President Ivan Gasparovic, Bush vowed to take "strong action" against the crisis and emphasized "our common desire to work with our European friends to develop a best as possible common policy."

Bush's weekend guests represent Britain, Canada, France, Germany, Italy and Japan. It was unclear whether energy export powerhouse Russia, which joins the G7 to discuss major international political issues as the G8, would take part.

The talks will come after the G7 finance ministers and central bank chiefs meet in the US capital on Friday, and US officials said those talks, not the White House gathering, were most likely to yield any breakthrough deal.

"The president will have the opportunity to hear directly from the finance ministers about how the financial crisis is affecting their respective economies and the steps they are taking to deal with these challenges, both individually and collectively," said White House spokeswoman Dana Perino.

And Bush "will emphasize the importance of nations working in a coordinated way to address the crisis, while respecting the different conditions in each economy," Perino told reporters.

After struggling with little success to stem a financial panic, US Treasury Secretary Henry Paulson was eyeing the possibility of direct capital injections to troubled banks as a means of shoring up a fragile system.

"These capital injections are something that Secretary Paulson is actively considering. But I'd have to refer you to him as to when he thinks he'd be able to make the first move," said Perino.

Such a step, already announced by British authorities, would give the government special shares of the banks in exchange for helping boost badly needed capital in an effort to unclog credit markets, analysts said.

Treasury Secretary Henry Paulson said Wednesday this is an option authorized by emergency legislation giving the administration 700 billion dollars to buy up distressed assets from a real estate meltdown.

"We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size," Paulson said.

Bush has repeatedly reached out to world leaders over the past few weeks in an effort to craft a coordinated strategy for confronting what some are calling the worst financial crisis since the Great Depression of the 1930s.

He spoke to German Chancellor Angela Merkel and Brazil's President Luiz Inacio Lula da Silva on Wednesday, and to British Prime Minister Gordon Brown, French President Nicolas Sarkozy, and Italian Prime Minister Silvio Berlusconi on Tuesday.

Bush "is open to the idea" floated by Sarkozy of calling an emergency summit on long-term responses to the crisis, but is focused for now on the immediate task of calming the upheaval on world markets and easing a global credit crunch, according to Perino.

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