As leaders of the countries using the euro currency announced measures to protect financial institutions and guarantee inter-bank lending, the head of the International Monetary Fund, Dominique Strauss-Kahn, said in Washington Sunday that a coordinated and effective program for combating the financial crisis is now in place. VOA's Barry Wood reports.
Strauss-Kahn spoke at the conclusion of a meeting of finance ministers from advanced and developing countries. He said the emergency measures announced on Sunday by European leaders in Paris are very positive.
"I'm confident because I think that what has been done these last few days, starting with the G-7 statement on Friday, going on after with the annual meeting of the [International Monetary] Fund and the World Bank, and ended a few hours, or minutes, ago by the meeting of the euro zone is exactly the type of action we have to take," said Dominique Strauss-Kahn.
France, Germany, Italy and other "euro bloc" countries will guarantee inter-bank lending and provide cash to banks that need it. The measures are intended to restore investor confidence and to get credit markets to function properly. On Saturday, Strauss-Kahn warned that the global financial system was on the brink of a melt-down.
According to World Bank President Robert Zoellick, the financial crisis in combination with the rise in food and oil prices that preceded it, have driven 100 million people into poverty this year. On Sunday, Zoellick told reporters that the unprecedented turmoil in financial markets is a particular threat to developing countries.
"This has been a man-made catastrophe," said Robert Zoellick. "The actions and responses to overcome lie in all our hands. We must also insure that as governments and publics turn their attention to matters close to home that they do not step back from their commitments to boost overseas assistance."
The economic crisis, in which many world stock markets have lost some 20 percent of their value in just the last week, seized the attention of finance officials here in Washington at the annual meetings of the World Bank and IMF. They endorsed an action plan for coordinated emergency measures that was unveiled on Friday by European, Japanese and U.S. finance ministers.