G8 leaders grappled Wednesday with turmoil on world markets sparked by a massive accounting scandal at US telecom giant WorldCom, agreeing to tackle corporate misdeeds on a united front.
"We are very concerned," Canadian Prime Minister Jean Chretien said after WorldCom revealed a US$3.8 billion black hole in its accounts, threatening to trump even the collapse of energy giant Enron in December.
WorldCom's revelations rocked global financial markets.
PHOTO: AFP
Wall Street, which took a hammering the day before, clawed back from Wednesday's losses by the close.
But European markets were still nursing their wounds. Across the 12-nation euro zone, the Euro Stoxx 50 index ended 1.76 percent lower at 2,955.3 points. The index had at one stage lost 6 percent of its value to stand at 2,827.9 -- its lowest level since October 1998.
G8 leaders fretted that the WorldCom scandal may further erode wary investors' waning confidence in the markets, said Chretien.
Market investments were critical to the health of the G8 economies and played an important role in consumer sentiment, said the Canadian host. "So it is a preoccupation," he said.
"Everybody agrees that we have to work on it collectively because it is not only a problem in the US but it is a problem that affects the economy of all the Western world and probably of all the countries in the world."
Decline of the dollar
The dollar's slide towards parity with the euro took up less time.
Asked how largely it had featured, Catherine Colonna, spokeswoman for French president Jacques Chirac, said: "Very little. Some people managed to mention it but only in passing and briefly. I would not say there was an exchange of views on the matter."
The dollar's decline, if kept at an orderly pace, could actually help the US recovery by stimulating US exports and helping correct the country's huge current account deficit, Fred Bergsten, director of the Washington-based Institute for International Economics, said in the run-up to this meeting.
Leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the US -- a grouping that includes Russia in the financial deliberations for the first time in G8 history -- appeared to be optimistic about the economic outlook, Chretien said.
"I can tell you that people all agreed that the situation is better in 2002 than it was in 2001 and it will be better in 2003," he said.
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