As finance ministers from the major economic powers met in Rome Friday, there were renewed calls for a strong coordinated response to combat the still growing economic and financial crisis around the globe.
British Chancellor of the Exchequer Alistair Darling says the current trouble is the severest downturn in generations. U.S. Treasury Secretary Timothy Geithner is urging governments to take exceptional steps to battle the deepending economic crisis. Geithner is also seeking endorsement of his plan for a public-private partnership to buy up the bad loans of U.S.-based financial institutitions.
The G7 nations include four west European nations, Canada, the United States, and Japan. Russia as well as the heads of the International Monetary Fund and World Bank will participate in some sessions of the meeting.
In Washington, Fred Bergsten of the Peterson Institute for International Economics says coordinated fiscal stimulus should result from the meeting.
"To try to encourage substantial stimulus of domestic demand in all of the major countries that have not yet done so. The U.S. is just about to put a big program in place, China has already announced one. I would argue that Europe is lagging," he said.
Former Italian premier Giuliano Amato, addressing a Washington conference, said to assure that the crisis does not worsen, the major power must avoid imposing restrictions on trade.
"Protectionist measures might completely destroy the potential, which is already low, of some developing - or not yet - developing countries. This, in my view, would be an excellent result [of the Rome meeting]," he said.
Amato said the crisis occurred because of huge built-up trade imbalances, primarily involving the United States and China, and cheap money that fueled a speculative property boom in the US and parts of Europe.
The G7 meeting will shape the agenda for the early April meeting of leaders from 20 high-income and developing countries in London.