|Japanese Finance Minister Sadakazu Tanigaki waits for the G7 ministerial meeting to begin |
Finance ministers and central bank governors from the world's richest nations concluded a two-day meeting in Washington Saturday saying vigorous action is needed to remedy global economic imbalances. Their statement came one day ahead of a meeting of World Bank and International Monetary Fund officials that is expected to address such topics as debt relief for poor nations.
Unlike previous meetings of the finance ministers of the major industrialized countries - the Group of Seven - this one was quiet on the inside and outside. The ministers made no public remarks and their meeting attracted few protesters.
At the end of the meeting, the ministers from Japan, America and western Europe, including Alan Greenspan, the head of the U.S. central bank and Jean-Claude Trichet, the head of the European Central Bank, did issue a written statement calling for vigorous action to improve the economy, but the ministers did not commit themselves to specific policy measures.
Despite this week's sharp decline in U.S. stock markets because of worry the economy may be slowing down, the group of seven ministers say the global expansion remains robust. The statement describes the 37 percent rise in oil prices over the past year as a headwind that can be countered by more efficient policies. They say that the United States needs to reduce its budget deficit and Japan and Europe need to reduce structural rigidities that hold down economic growth.
In a veiled reference to China, the statement says that strong economies with big trade surpluses should have more flexible exchange rates. Though the value of the U.S. dollar has been declining against other major currencies in the past two years, China maintains its currency at a fixed rate to the dollar - 8.3 yuan to a dollar. U.S. policymakers want China to raise the value of the yuan, which they believe would stem the flood of Chinese goods into the U.S. market and give U.S. exporters more opportunities in China.
Immediately following the end of the meeting of finance ministers, the officials from Europe, America and Japan went into a larger meeting of the International Monetary Fund's policy making committee. That latter group includes major oil exporting nations, and key developing countries from Africa, Asia and Latin America.
The multiple gatherings of finance officials continue through Sunday.