News / Economy

G7 Seeks Ways to Revive Stalled Economic Growth

French Finance Minister Francois Baroin (r) listens to U.S Secretary of the Treasury Timothy Geithner (l) during talks in Marseilles,  Sept.9, 2011
French Finance Minister Francois Baroin (r) listens to U.S Secretary of the Treasury Timothy Geithner (l) during talks in Marseilles, Sept.9, 2011
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Finance ministers and central bankers of leading industrialized nations are meeting through Saturday in the southern French city of Marseilles to assess how to counter growing financial and economic problems.

The Group of Seven meeting takes place amid warnings that leading industrialized economies risked tipping back into recession and of a growing financial crisis in the 17-nation eurozone.

Speaking at London-based think tank Chatham House before heading to the Marseille talks, International Monetary Fund chief Christine Lagarde said that while each nation faces its own set of problems and solutions, she has one piece of advice for all G7 members.

"At this stage and given the economic circumstances that we're facing, countries and policymakers in those countries around the world must act now, must act boldly and must act together," said Christine Lagarde.

Grim economic news has hit most of the Group of Seven, which include the United States, France, Britain, Italy, Japan, Canada and Germany. A report published Thursday by the Paris-based Organization for Economic Cooperation and Development found growth was stalling in many leading economies.

The Marseilles meeting is expected to tackle Europe's growing debt crisis, which risks dragging in G7 member Italy along with French and German banks. It opened a day after President Barack Obama made a key speech on ways to boost jobs and economic recovery in the United States.

Lagarde said the IMF welcomed Obama's proposals but urged the U.S. to clarify a medium-term plan to put its massive public debt on what she described as "a more sustainable path."  

She also urged more clarity and action among eurozone members.

"If growth continues to lose momentum, balance sheets problems will worsen, fiscal sustainability will be threatened and the scope for policies to salvage the economy will disappear," she said.

Chatham House associate fellow Stewart Fleming, who specializes in international economics, says the Marseilles meeting should offer one lesson.

"The fact is that if banks in Europe get into difficulties, banks in the United States will have difficulties and these difficulties will transmit very quickly to other parts of the transatlantic economy…that doesn't mean they should all offer the same policies," said Fleming. "But there should be some public recognition of a sense of 'we're all in this together.'"

Several North African and Middle Eastern nations are also attending the Marseilles meeting, which will look at ways to relaunch their economies after this year's popular Arab Spring uprising.

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