Fund manager Marc Renaud for years paid heed to the G7 industrialized nations' pronouncements. This Friday, when G7 finance ministers meet in Paris for two days of talks, he'll be skiing in the French Alps.
"I used to think their statements might change the world, but not anymore," says Renaud, who helps manage 1 billion euros (US$1.1 billion) in stocks for CCR Actions, a unit of Germany's Commerzbank AG. "Instead of providing leadership, these guys are just fighting with each other."
The G7 member countries today are divided on everything from interest rates and fiscal policy to waging war on Iraq. So, instead of seeking to coordinate government efforts to spur economic recovery, the ministers will probably stick to less controversial subjects, French officials said.
"This meeting will be held in particularly delicate economic circumstances," said Francis Mer, France's finance minister and host of the meeting.
"The power of the G7 lies in passing a message to the world so that the world economy works a little less badly."
The G7 countries -- the US, Japan, Germany, France, the UK, Italy, Canada -- account for two-thirds of the world economy. Now, amid political differences, the largest economies are taking divergent paths as they try to recover from recession.
The rift over whether to take military action to disarm Iraq and oust President Saddam Hussein intensified over the weekend as antiwar marches drew millions, in the US as well as Europe.
British Prime Minister Tony Blair has backed the US government in pushing for swift action against Iraq, a policy that French and German leaders oppose.
"The risk is that the Iraq virus will also infect this meeting and block action," said Adolf Rosenstock, economist at Nomura International Plc. "It would be bad news if the transatlantic hurricane devastated economic relations as well."
The economic differences already exist. President George W.
Bush plans to cut taxes, Germany and Britain are raising them. And the European Central Bank has reduced borrowing costs at less than half the pace of the US Federal Reserve.
The G7's three largest economies are struggling: Germany's GDP gained 0.2 percent last year, its smallest increase since 1993. The US economy, the world's largest, grew at a 0.7 percent annual pace in the fourth quarter, down from 4 percent in the July-September period. Japan's economy, aided by a surge in fourth-quarter exports, grew only 0.3 percent last year.
"Nobody can be sanguine about the state of the world economy right now," said John Manley, Canada's finance minister.
With economies sputtering, the reluctance of finance ministers to develop a strategy for growth has disappointed executives as well as investors.
"We need something like a Marshall Plan," said Gilles Granier, chief executive of the French subsidiary of Intel Corp, the world's biggest computer chipmaker. "The G7 needs to act."
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
The Central Weather Administration (CWA) is set to issue sea and land warnings for Tropical Storm Krathon as projections showed that the tropical storm could strengthen into a typhoon as it approaches Taiwan proper, the CWA said yesterday. The sea warning is scheduled to take effect this morning and the land warning this evening, it said. The storm formed yesterday morning and in the evening reached a point 620 nautical miles (1,148km) southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, moving west-southwest at 4 kph as it strengthened, the CWA said. Its radius measured between 220km and 250km, it added. Krathon is projected
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