Saturday, September 10, 2011

Economic gloom piles pressure on G7 finance talks

G7 finance chiefs meet on Friday under heavy pressure to take action to revive flagging economic growth and calm the biggest confidence crisis in financial markets since the global credit crunch.

Host country France has called for a co-ordinated response from the Group of Seven industrialised nations after mounting anxiety over Europe's debt crisis and the fragility of its banks caused a big fall in world stock markets in recent weeks.

Differences between the economic problems facing the euro zone, Britain and the United States - which unveiled a $447 billion jobs package on Thursday - are complicating the task though, meaning one-size-fits-all solutions will not work.

IMF chief Christine Lagarde said in London before boarding a flight for Marseille that policymakers in advanced economies should use all available tools to boost growth and called for bold action to weather a "dangerous new phase" of recovery.

She also cautioned against too much fiscal consolidation in a climate of sputtering growth.

But a G7 source told Reuters a unanimous agreement at the Marseille talks on coordinated monetary easing was unlikely. more