Prague, 17 April 2005 (RFE/RL) -- Finance ministers from the G-7, the group of the world's most developed industrial nations, met in Washington yesterday in a bid to ease the concerns of world financial markets.
The seven noted the strong global economy and pledged to reduce global imbalances that impede continuing economic growth. In a joint statement the ministers described the worldwide economic expansion as remaining "robust" and forecast "solid growth" for this year. But the ministers noted in their statement that skyrocketing prices for oil represented a "headwind" in global economic growth.
U.S. Treasury Secretary John Snow acknowledged the negative effect of high world oil prices. But he is downplaying the impact on the prospects for global economic growth.
"(Even with) the drag, or headwinds being created by these high prices, the sense is the global economy will continue to grow at a good clip, a strong clip," Snow said.
Snow's optimistic appraisal of the world economic situation neglected to make mention of another problem identified by the economic ministers -- the growing U.S. trade deficit.
Snow did say the U.S. administration was "strongly committed" to reducing the budget deficit. That deficit currently stands at more than $400 billion.
German Finance Minister Hans Eichel encouraged the U.S. efforts to reduce its trade deficit, saying the U.S.'s increasing habit in recent years of the financing of the American deficit by foreign, mainly Asian, central banks cannot be continued.
British Chancellor of the Exchequer Gordon Brown says each of the world's continents must be vigilant about their own economic problems if the positive expectations on world growth are to continue.
"We noted the continuing global economic expansion, the robust growth that was expected this year in the economy. But we also discussed how we must be vigilant to the risk to that growth over the next few months," Brown said. "And it was recognized that for the world economy to continue to grow at the rate at which it is growing, and to maintain the stability that has been achieved, each continent must make its contribution to that stability and growth."
The G-7 finance ministers also addressed the issue of debt relief for poorer nations. Their statement backed the goal of fully canceling debt for such countries but did not resolve differences between competing plans from the U.S. and Britain.
Brown says there are still questions that must be resolved. But he said there is progress.
"But the general issue is, how can we finance the next stage of multilateral debt relief? What are the mechanisms by which we can deal with the debts that are owed to the IMF, and the debts that are owed to the African Development Bank, and the debts that are owed to the World Bank? And I believe we are making considerable progress now on these issues," Brown said.
UN Secretary General Kofi Annan is due to address International Monetary Fund members today on the need for richer countries to provide aid to poor nations.
The IMF has been critical of the world's leading economic nations for their failure to correct imbalances in their system. IMF chief Rodrigo Rato said yesterday that the global economic system was not performing to fullest potential because of the huge current account deficit in the United States, weak economic growth in Europe and Japan, and inflexible currency regimes in Asia.
Saturday's meeting of G-7 finance ministers drew a loud group of several hundred protesters. Police kept several hundred demonstrators away from the G-7 meeting. But those groups assembled near the World Bank's headquarters.
The demonstrators called for more debt relief to poor countries. They also expressed opposition to the selection of U.S. Deputy Defense Secretary Paul Wolfowitz to be the next World Bank president.