OFFICIALS from the world's leading advanced economies papered over divisions among themselves as they sought to assure sceptical investors and voters that they had solutions to economic woes on both sides of the Atlantic.
The inability of finance ministers and central bankers from the Group of Seven nations to come up with a decisive response so far to problems of growth was reflected in US and European markets, which tumbled as the G7 officials met inside a cliff-top palace overlooking the sea.
G-7 Torn Between Stimulus and Cuts
The difficulty in coming up with a common solution was reflected in the group's communique, which hovered between backing stimulus and backing austerity. "Fiscal policy faces a delicate balancing act," the G-7 said. "Given the still fragile nature of the recovery, we must tread the difficult path of achieving fiscal adjustment plans while supporting economic activity, taking into account different national circumstances."
A senior U.S. official said Europe's troubles dominated discussions at the meeting. European ministers acknowledged the seriousness of their situation and committed themselves to sending a clear message to markets that they would execute their plan, said the U.S. official.
G7 pledges 'strong, coordinated' effort on economy
G7 brushes off calls for unified response
MARSEILLE - The financial leaders of the world’s most developed economies ignored calls for a stronger unified response to Europe’s debt crisis, insisting yesterday that each country should tread its own path back to growth amid concerns of a global slowdown.
The so-called Group of Seven economies - the United States, Canada, Japan, Britain, France, Italy, and Germany - are all facing a similar challenge. The recovery that began a little over a year ago is already running out of steam, but governments’ ability to boost growth is hampered after the financial crisis pushed up their deficits.
Earlier as the financial ministers gathered in Marseille, Christine Lagarde, the head of the International Monetary Fund, had urged policy makers to take concerted action quickly.
That call didn’t gain much traction.
Finance-officials meeting fails to calm markets
MARSEILLE, France — If anyone was counting on finance officials of the powerful Group of 7 nations to help map a way out of Europe's debt crisis and calm the markets, consider this: The G-7 met on Friday, the crisis grew worse and the markets plummeted.
The U.S. View on Europe From the G-7 Talks
Among the key takeaways from the gathering, according to a senior U.S. official who briefed reporters Friday night: Euro-zone members have enough financial firepower to resolve the crisis, but need to show that they’ll fulfill their promises by demonstrating sustained action over time.
The U.S. official’s comments indicated that policymakers in Europe do acknowledge the widespread doubts among investors that the euro-zone members will carry out what they’ve promised. But the comments also suggested little genuinely new action from Europe is likely to come soon, with leaders there focused (at least in the coming weeks) on meeting the commitments they’ve already announced.
Greece Must Keep Cutting Or ‘Probably’ Exit Euro, Flaherty Says
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