G7 rejects protectionism, urges measures to back g

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A general view of the Group of Seven (G7) Finance Ministers and Central Bank Governors meeting in Rome, Saturday, Feb. 14, 2009. Officials from the leading industrial nations will discuss new financial markets rules, concerns about protectionist measures in stimulus plans, and the effect of the crisis on poorer countries.


ROME, Feb. 14 - The Group of Seven (G7) finance ministers and central bank governors met in Rome on Friday and Saturday to discuss the global economic down-turn and identify possible solutions to ease the financial crisis.
In a final joint communiqué released Saturday, representatives from the world's leading industrialized nations - the United States, Germany , Japan, France, Italy, Britain , and Canada - rejected all sorts of protectionist measures, pledged to sustain employment and economic growth and, at the same time, strengthen the banking system.
The finance ministers and central bank governors stressed they will do all they can to fight recession and avoid distorting free trade.
Italy is hosting the meeting of G7 in its role as rotating president for 2009. The Rome agenda focused on adopting global measures and economic policy reforms capable of stabilizing the world economy and ensuring transparency to allow markets to function correctly.
The message coming from the Rome meeting is very important in allaying fears that governments wanting to protect national jobs and industries would easily abandon the principles of fair competition. The G7 nations want to avoid repeating the errors of the Great Depression, when protectionism was the key-policy.
However, the final communiqué and closing statements of the meeting have not yet erased concerns over what many market experts and financial analysts consider as a contradiction between verbal commitments to free trade and measures that look quite different, like the economies need to cooperate and work together without giving in to protectionism.
The G7 ministers believe that protectionist measures to boost national economies would only threaten world prosperity. The governmental bailouts in Europe and the United States have, in fact , contributed in bettering the financial situation through the injection of liquidity but at the same time have raised concerns over protectionism.
The joint agreement issued from the Rome meeting endorsed the US and British approach to fixing the banking system by recapitalizing banks. In previous days there had been criticism over the American bailout and US President Barack Obama's 787-billion-dollar economic rescue plan focused on public building projects, with conditions including exclusive use of US steel and other US-made goods.
The Rome meeting held a particular significance due to the international debut of new US Treasury Secretary Timothy Geithner. He called for all countries to sustain a commitment to must strengthen their cooperation in better regulation and supervision of banks and markets.
In their final agreement, the finance ministers highlighted that have already the meeting, said that national bailouts would only worsen the global crisis, not resolve it.
showed the scale of the economic downturn and Dominique Strauss-Kahn, head of the International Monetary Fund, said the worst had probably still to come.
In the last quarter of 2008, economic output in the euro zone shrank more than any quarter on record and the picture was much the same in the 27 countries of the European Union. All of the large G7 economies contracted in the last quarter of 2008 and even rising stars such as China are slowing down.
The leading industrialized countries promised to write within four months financial regulations with common principles of transparency, in time for July's G8 summit in Sardinia, Italy.
The outcome of Saturday's Rome meeting will first influence, however, the next important meeting taking place on April 2 in London , where the G20 leaders (the G7 nations plus the world's most important developing economies like China and India) will meet to further the talks regarding the international financial outlook.