Tags: g 20 | greece | europe | economy

G-20 Strikes Hopeful Tone, but Officials Fret Over Greece

Friday, 17 Apr 2015 04:49 PM


The Group of 20 leading economies struck a hopeful tone on the outlook for global growth on Friday even as officials fretted that Athen's inability to strike a deal with its lenders could upset Europe's tentative recovery.

In a communique after a two-day meeting, G-20 finance ministers and central bankers welcomed brighter economic signs in rich nations, but lamented weakness in emerging markets.

"Risks to the global economy are more balanced since we last met," the finance officials said. "Near-term prospects in advanced economies, notably the euro area and Japan, have improved recently, while the U.S. and UK continue to record solid growth, which could support a stronger global recovery."

Still, the group of developed and emerging market nations, which represent around 80 percent of global economic output, warned of risks. "There are important challenges, including volatility in exchange rates and prolonged low inflation, sustained internal and external imbalances, high public debt, and geopolitical tensions," it said.

Greece was not mentioned by name in the communique and Turkish Deputy Prime Minister Ali Babacan, speaking for the G-20 at a news conference, said it was not featured in the formal discussions.

But it was clearly on the minds of officials in Washington for the G-20 gathering, and weekend meetings of the International Monetary Fund and World Bank.

"The mood is notably more gloomy than at the last international gathering," British finance minister George Osborne told reporters earlier in the day, adding that discussions on Greece "pervaded" every meeting.

"It's clear now to me that a misstep or a miscalculation on either side could easily return European economies to the kind of perilous situation we saw three to four years ago."

Athens has been trying to strike a deal with its IMF and EU creditors to ease the bailout terms the lenders imposed. Until an agreement is reached, bailout cash is on hold.

Progress in the talks, however, has been painfully slow and Greece could run out of money ahead of debt repayments next month.

"It's important that we in the coming days make significant progress, that the process gains momentum," IMF European Department Director Poul Thomsen told reporters.

"There needs to be a comprehensive package and that will clearly take several weeks or more of discussions."

Concerns about Greece contributed to stock price declines in Europe and on Wall Street.

While the G-20 sounded guardedly optimistic on the global economy, it pointed to a risk of financial volatility as the U.S. Federal Reserve prepares to raise interest rates.

"In an environment of diverging monetary policy settings and rising financial market volatility, policy settings should be carefully calibrated and clearly communicated to minimize negative spillovers," the communique said.

The main worry centers on emerging markets, which have been beset by capital outflows as investors placed bets on higher interest rates in the United States. The G-20 said nations could protect themselves if needed by taking steps to curb sharp capital movements.

© 2017 Thomson/Reuters. All rights reserved.

   
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Economy
The Group of 20 leading economies struck a hopeful tone on the outlook for global growth on Friday even as officials fretted that Athen's inability to strike a deal with its lenders could upset Europe's tentative recovery.
g 20, greece, europe, economy
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2015-49-17
Friday, 17 Apr 2015 04:49 PM
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