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Archive for Sunday, April 29, 2001

Wealthy countries pledge vigilance to fight recession

April 29, 2001

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— Finance leaders from the United States and other wealthy industrial countries on Saturday pledged to remain "vigilant and forward-looking" in their efforts to fight the current global slowdown.

The finance ministers and central bank presidents from the Group of Seven countries the United States, Japan, Germany, France, Britain, Italy and Canada promised to pursue appropriate policies in each of their countries that will lead to stronger growth.

Treasury Secretary Paul O'Neill, calling the talks "candid and productive," said he told the group that U.S. officials think a sound foundation has been laid for renewed growth in the United States.

"We all agreed that growth in our economies is crucial to global prosperity," O'Neill told reporters after the nearly six hours of discussions ended. "I emphasized to my colleagues my belief that in the United States, the foundations for economic expansion are sound."

In their six-page joint statement, the G-7 finance officials endorsed O'Neill's assessment, saying that while U.S. growth has slowed sharply, the country's long-term economic fundamentals "remain strong."

The G-7 statement urged the Federal Reserve, which has already cut interest rates four times this year to make sure the country doesn't slide into a recession, to keep pursuing policies that will contribute to sustained growth with stable inflation.

The G-7 statement ducked one of the controversies going into the meeting, whether the European Central Bank should start cutting interest rates to bolster global growth prospects. Bank officials, citing concerns about inflation, refused again last week to do so and the G-7 statement was silent on what interest rate policies the Europeans should pursue.

The discussions at Blair House were led by O'Neill and Federal Reserve Chairman Alan Greenspan.

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