G7 Talks Growth, Austerity Amid Yen Concerns
The Group of Seven top economies are set for a second day of talks on Saturday aimed at spurring growth amid U.S.-Europe divisions over the scale of austerity and renewed market focus on "currency wars" after the yen hit new dollar lows.
Our task is to nurture the recovery," British finance minister George Osborne said Friday as he opened the gathering amid pressure on Britain and other indebted European nations to scale back deep cuts to state spending, in order to support fragile growth.
"Our challenge is not to falter in the difficult steps we need to take to make that recovery sustainable and lasting," said Chancellor of the Exchequer Osborne.
"Markets have calmed, and there are signs that this is feeding through into greater confidence. But we cannot take the global recovery for granted," he added.
The two-day G7 meeting in Aylesbury, northwest of London, is being attended by finance ministers and central bank governors from all the member states as well as top representatives from the European Union and International Monetary Fund.
The G7 -- comprising Britain, Canada, France, Germany, Italy, Japan and the United States -- is building on last month's wider Group of 20 meeting, while looking ahead to next month's G8 heads of state summit in Northern Ireland.
Britain is this year president of the G8 -- or G7 plus Russia -- and is using the platform to also push for greater multilateral co-operation in tackling tax evasion.
The IMF, while welcoming efforts by indebted nations to cut spending, has urged Britain to lessen the pace of its austerity programme to support the country's fragile economic recovery.
And on Friday, U.S. Treasury Secretary Jacob Lew said the world's biggest economy feels "strongly there needs to be the right balance between austerity and growth".
The European Union recently granted France two extra years to meet its deficit target on condition that it pursues reforms.
The G7 nations, which together produce about half of the world's economic output, are slowly recovering from a late 2012 slowdown, the OECD said recently, with Japan and the United States leading the way.
Emerging economies were tipped to remain by far the strongest growth performers, with China expected to expand by more than 8.0 percent in the first half of 2013, the Organization for Economic Development and Cooperation said.
Forecasts remain very uncertain however, the OECD added, with new-found buoyancy on financial markets yet to feed through to the wider economy.
The meetings take place as U.S. and Frankfurt stock markets have raced to record high points this week following positive economic data out of the United States and Germany.
Source: Agence France Presse
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