G7 finance ministers have urged bold reforms to the world financial system while leaving little doubt that the global economic turmoil is far from over.
Italian Finance Minister Giulio Tremonti called on Saturday for a “new world economic order” as he wrapped up the crisis meeting over which he presided in Rome.
In a joint declaration, the G7 called for “urgent reforms” of the international financial system and reiterated a bleak outlook for the world economy after fresh data showed the eurozone recession deepening.
PHOTO: AFP
Analysts said the initiatives proposed after two days of talks would be tested in April when the G20 emerging and rich nations are to meet in London, with China wielding particular clout.
Beijing came in for special praise in Rome for its “continued commitment to move to a more flexible exchange rate” that would likely lead to the appreciation of the yuan.
The charge that Beijing was letting its currency slip to protect the price of its exports has been a constant source of friction with Washington.
The G20 meeting will be crucial in reinforcing the ambitions of the G7, said analyst Marco Annunziata, chief economist at Italian bank UniCredit.
“The G20 will be far more important because the G7 countries cannot resolve the crisis on their own. They need the help of the emerging economies,” Annunziata said.
“The fact that China is still buying US Treasury bonds is essential,” Annunziata said.
The financial leaders from the G7 grouping of the UK, Canada, France, Germany, Italy, Japan and the US plus Russia met as countries were struggling with the worst economic crisis in decades.
Grim data on Friday showed that the eurozone economy slumped by 1.5 percent in the fourth quarter of last year. The EU overall and several individual EU countries — including G7 host Italy — are also in recession.
The G7 delegates in a joint statement vowed to avoid protectionism as they seek to stabilize the tottering world economy and financial markets and said stabilization of the world economy was their “highest priority.”
The global crisis “has highlighted fundamental weaknesses in the international financial system and that urgent reforms are needed,” the statement said.
US Treasury Secretary Timothy Geithner made his debut on the world stage, after taking office last month and launching a vast US financial stabilization plan that received a skeptical reaction in the US.
He vowed that his country, the biggest economy in the world and the source of much of the financial drama in recent months, would work with other nations for a consensus on reforms.
“We need to begin the process of comprehensive reform of our financial system and the international financial system, so the world never again faces a crisis this severe,” Geithner said after the talks.
“The key elements are to make sure that we’re making banks strong enough that they can be supportive of recovery,” he told reporters. “It will require ways to bring in private capital, provide public capital when that’s necessary and it’s going to require direct action to try to get credit markets working again.”
Geithner assured his counterparts that US President Barack Obama’s US$787 billion plan to resuscitate the economy, approved on Friday, would not violate in any way the US’ commitment to free trade.
Geithner, who was among friends and colleagues he had worked with from his days at the US Federal Bank, appealed to the “common imperative” to sustain open trade.
“These are global challenges and it is imperative that we work together to address them,” he said.
The G7 reiterated the view of several top delegates that protectionism — when countries take measures that favor their own economies at the expense of others — was a threat to stability.
Germany and Japan — net exporters — were especially keen to see the group endorse efforts to fight protectionism, German Finance Minister Peer Steinbrueck said, noting that 40 percent of German output was export-driven.
“This is the reason why we are the most affected by this worldwide recession,” Steinbrueck told a news conference.
French Finance Minister Christine Lagard said the group recognized that protectionism could take many forms in the banking, financial and economic domain.
“The important thing is to coordinate very closely our respective national actions within our relaunch plans, but there were no accusations or criticism against this or that plan, this or that country, so we are all on the same line,” she said.
AT RISK: The council reiterated that people should seriously consider the necessity of visiting China, after Beijing passed 22 guidelines to punish ‘die-hard’ separatists The Mainland Affairs Council (MAC) has since Jan. 1 last year received 65 petitions regarding Taiwanese who were interrogated or detained in China, MAC Minister Chiu Chui-cheng (邱垂正) said yesterday. Fifty-two either went missing or had their personal freedoms restricted, with some put in criminal detention, while 13 were interrogated and temporarily detained, he said in a radio interview. On June 21 last year, China announced 22 guidelines to punish “die-hard Taiwanese independence separatists,” allowing Chinese courts to try people in absentia. The guidelines are uncivilized and inhumane, allowing Beijing to seize assets and issue the death penalty, with no regard for potential
STILL COMMITTED: The US opposes any forced change to the ‘status quo’ in the Strait, but also does not seek conflict, US Secretary of State Marco Rubio said US President Donald Trump’s administration released US$5.3 billion in previously frozen foreign aid, including US$870 million in security exemptions for programs in Taiwan, a list of exemptions reviewed by Reuters showed. Trump ordered a 90-day pause on foreign aid shortly after taking office on Jan. 20, halting funding for everything from programs that fight starvation and deadly diseases to providing shelters for millions of displaced people across the globe. US Secretary of State Marco Rubio, who has said that all foreign assistance must align with Trump’s “America First” priorities, issued waivers late last month on military aid to Israel and Egypt, the
‘UNITED FRONT’ FRONTS: Barring contact with Huaqiao and Jinan universities is needed to stop China targeting Taiwanese students, the education minister said Taiwan has blacklisted two Chinese universities from conducting academic exchange programs in the nation after reports that the institutes are arms of Beijing’s United Front Work Department, Minister of Education Cheng Ying-yao (鄭英耀) said in an exclusive interview with the Chinese-language Liberty Times (the Taipei Times’ sister paper) published yesterday. China’s Huaqiao University in Xiamen and Quanzhou, as well as Jinan University in Guangzhou, which have 600 and 1,500 Taiwanese on their rolls respectively, are under direct control of the Chinese government’s political warfare branch, Cheng said, citing reports by national security officials. A comprehensive ban on Taiwanese institutions collaborating or
France’s nuclear-powered aircraft carrier and accompanying warships were in the Philippines yesterday after holding combat drills with Philippine forces in the disputed South China Sea in a show of firepower that would likely antagonize China. The Charles de Gaulle on Friday docked at Subic Bay, a former US naval base northwest of Manila, for a break after more than two months of deployment in the Indo-Pacific region. The French carrier engaged with security allies for contingency readiness and to promote regional security, including with Philippine forces, navy ships and fighter jets. They held anti-submarine warfare drills and aerial combat training on Friday in
RSS