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Mon, May 19, 2003 - Page 12 News List

World's finance ministers meet, emphasize reform


Bereft of a quick fix to ward off recession, the world's leading finance ministers on Saturday voiced confidence in stronger growth and committed to deep-seated reforms for rich and poor regions as the remedy.

Meeting for the first time since the end of the war in Iraq, ministers from the G7 powers and Russia discussed but broke little ground on debt relief, terror funds, financial stability and links with the developing world, in preparation for a summit of heads of state in two weeks time in Evian.

Despite fears of imminent recession in many G7 countries, concerns about Japanese-style deflation spreading across the globe and the recent slide in the US dollar, ministers said that many downside risks had receded.

"We're optimistic more than anything else," French Finance Minister and G7 host Francis Mer told a news conference.

The statement at the end of the two-day gathering on Saturday provided a "to do" list of ongoing reforms for each country to pursue in order to create a better environment for the private sector to lead economic recovery.

The G7 said there was optimism economies would improve soon without the need for any emergency action and officials told reporters there was some hope business and consumer confidence would improve following the end of the war in Iraq.

The G7 countries -- the US, Canada, Japan, Italy, Britain, Germany and host France -- said dangers to global growth and prosperity were receding but challenges remained.

The US said it would encourage job creation by urging more savings and investment by individuals and companies. European nations said they would continue to work for more flexible economies via reforms of labor, product and capital markets.

Japan, grappling with a fresh crisis at one of its leading banks just as the G7 met, emphasized financial sector reform and the need to fight deflation.

The lack of concrete action may reflect the fact that the main goal of the meeting was to tee-up next month's summit in the French town of Evian, where French President Jacques Chirac wants more vocal commitments to bridging the gap with Africa and other impoverished parts of the world.

The ministers also addressed issues of better-organized lending structures for developing and middle-income countries.

In a new initiative, G7 ministers asked the Paris Club of creditor nations to find more flexible ways of dealing with the debt problems of countries with big repayment troubles in a move that could be applied to post-war Iraq.

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