Tags: recession

U.S. Rallies G7 Finance Chiefs to Fight Recession

Friday, 13 February 2009 11:26 AM

ROME -- The United States on Friday urged "exceptional" action by global economic powers to help the world scramble out of a deepening recession, as the Group of Seven finance leaders met for high-stakes talks.

US Treasury Secretary Timothy Geithner arrived for bilateral talks on Friday afternoon with Italian Finance Minister Giulio Tremonti and several other of the top delegates from the seven leading industrialised nations.

"This meeting takes place amid a severe global economic downtown and tremendous stress in the world's financial markets," Geithner's delegation said in a statement.

"The Secretary will encourage his counterparts to take strong actions to address macroeconomic and financial sector challenges and will underscore that these extraordinary times call for exceptional and complementary measures by all."

Ahead of Friday's opening dinner of finance ministers and central bank heads, several delegates voiced alarm over protectionism, which they fear may undermine efforts to ease the downturn.

International Monetary Fund head Dominique Strauss-Kahn warned of a "really big" risk that the financial sector could be hit by a wave of protectionism -- countries propping up their own economies in ways that harm others.

"In no way in a global crisis (should there) be a domestic or national solution," he said. "We have to find a global response."

The G7 officials were to kick off their main meetings on Saturday, comparing notes on stimulus packages and trying to forge a consensus on the next steps, including possible new rules for global finance.

Geithner was set to discuss his vast US financial stabilization plan, which received a sceptical reaction in the United States.

Russia's Finance Minister Alexei Kudrin was also to attend.

More measures of the crisis facing them emerged on Friday, with data showing the eurozone economy slumped by 1.5 percent in the fourth quarter of 2008 and the European Union joined it and several individual EU countries in recession.

Britain's finance minister Alistair Darling said the size of the contraction "demonstrates the scale of the problems we face," according to Dow Jones Newswires. He said the world faced "the severest downturn in generations."

Japanese Finance Minister Shoichi Nakagawa earlier warned that his G7 delegation would take a "resolute stance" against the "absolute evil" of protectionism at the meeting.

Nakagawa said on Tuesday that the G7 nations -- Britain, Canada, France, Germany, Italy, Japan, and the United States -- were expected to discuss the sensitive "Buy American" clause in the US economic stimulus package.

Meanwhile, France has fiercely defended its plan to pump billions of euros (dollars) into its struggling auto sector against EU charges of protectionism.

The Italian finance ministry said ahead of the meeting: "Fostering a common framework for policy action and fighting protectionist pressures, which tend to gain strength in difficult economic conditions, will be the centrepiece of our work."

It also said that Italy, as president of the talks, would push for "a minimum basic set of rules" on world financial regulation and would discuss reform of international financial institutions and "food security issues."

The World Bank warned on Thursday that the global economic crisis was driving tens of millions into poverty in developing countries.

© 2009 Agence France-Presse. All rights reserved.

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ROME -- The United States on Friday urged "exceptional" action by global economic powers to help the world scramble out of a deepening recession, as the Group of Seven finance leaders met for high-stakes talks.US Treasury Secretary Timothy Geithner arrived for bilateral...
Friday, 13 February 2009 11:26 AM
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