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German Finance Minister Wolfgang Schaeuble at a G7 finance ministers' meeting in Canada - Source: Reuters -
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Finance ministers and central bankers from the Group of Seven
economies met in the Canadian Arctic to discuss the Euro zone's
budget crisis, the recovery from global recession and reforms of
international banking.
Below is a summary of the outcome of the two days of talks
that ended on Saturday, based on comments from G7
officials:
Euro zone fiscal crisis
The collapse in confidence among investors about Greece's ability
to pay its debts, and knock-on concerns about Portugal and Spain,
pushed the Euro zone's fiscal crisis onto the agenda of the G7
meeting.
European G7 countries told the United States, Japan and Canada that
they would make sure that Greece delivered on its promises to slash
its budget deficit by the end of 2012.
"Will we will monitor and make sure it (the Greek plan) is
managed," French Economy Minister Christine Lagarde said.
Financial regulation
Last September, world leaders asked the International Monetary Fund
to come up with proposals for a levy on banks to help pay for
financial rescues and in Canada this weekend ministers roundly
supported the idea.
The Obama administration was seen as cool to the idea last year but
it has since taken a tougher approach to banking regulation,
mindful of the anger among voters at huge bonuses on Wall Street
soon after its rescue with taxpayers' money.
Global recovery, exit strategies
The G7's host, Canadian Finance Minister Jim Flaherty, said the
global economy was recovering but was still too weak for
governments to withdraw stimulus measures.
In an apparent nod to concerns about huge budget deficits run by
countries like the United States to keep their economies going, he
said governments were starting to look at scaling back their
support and returning to fiscal health.
Currencies
The G7 made no comment on foreign exchange, but ministers said the
group stood by its statement of last October.
That communiqué politely welcomed China's decision to allow
its currency to strengthen and said that should help narrow the
imbalances in the world economy that, many say, sowed the seeds of
the financial crisis of 2008.
France's Lagarde said under the new, more informal format of the G7
meetings, the group had decided to issue statements on currencies
only when it had something new to say.
G7 members appear split on what is the best forum to discuss
foreign exchange policy with some European members, like France,
favouring the G7 and Japan suggesting that discussions on China's
Yuan, for example, could take place in the wider Group of 20
developed and emerging economies, of which China is a member.
Future of the G7
The G7 is expected to continue to meet as often as it deems
necessary, and several officials said they liked the no-nonsense,
informal format of the Iqaluit talks, which allowed them to speak
their minds openly and freed them from long hours negotiating over
the language of a communiqué.
"Open speech, not working out communiqués, that is the
meaning of the new G7," said German Finance Minister Wolfgang
Schaeuble.
The next G7 finance ministers' meeting will be on the sidelines of
the International Monetary Fund's spring meetings in Washington,
Canada announced.
Helping Haiti
Canada said the G7 countries were writing off debts owed to them by
disaster-struck Haiti and urged global lenders to do the same.
Few delegates mentioned the Caribbean island where more than 200,000 people died in a January 12 earthquake.
