The G7 cannot do much. Many of the member of the G20 are larger and the concentration of the G7 in Europe which is n the grips of the Greece problem creates a distraction.
The key statements from the week-end meeting was that Greece should be able to solve its problems. This was not what the markets wanted to hear. The G7 also stated that banks should pay for their rescue. Sounds like more taxes on banks which will not help growth.
Speaking after a meeting of finance ministers and central bankers from the G7 in Iqaluit, Canada yesterday, Canadian finance minister Jim Flaherty said the countries would “continue to deliver the stimulus to which we are mutually committed and begin looking at exit strategies to move to a more sustainable fiscal track”.
Acknowledging the risks, a document drawn up by Canadian officials for discussion said G7 members should set “clear, credible and consistent” plans to strengthen their budgets. Delay in doing so would lead markets to “begin to question our commitment to sound medium-term policy frameworks, with the result that interest rates would rise,” said the report.
Bloomberg/Reuters
Let's not forget the EU has requirements that budget deficits cannot get beyond 3% of GDP. Somehow Greece got to 12.7%. So who in Europe was minding the tore. Granted a recession should allow for greater short-term deficits but off by factor of 4X?
The fact that there was not much news suggests that the G7 should be disbanded and eliminate the policy noise.
The key statements from the week-end meeting was that Greece should be able to solve its problems. This was not what the markets wanted to hear. The G7 also stated that banks should pay for their rescue. Sounds like more taxes on banks which will not help growth.
Speaking after a meeting of finance ministers and central bankers from the G7 in Iqaluit, Canada yesterday, Canadian finance minister Jim Flaherty said the countries would “continue to deliver the stimulus to which we are mutually committed and begin looking at exit strategies to move to a more sustainable fiscal track”.
Acknowledging the risks, a document drawn up by Canadian officials for discussion said G7 members should set “clear, credible and consistent” plans to strengthen their budgets. Delay in doing so would lead markets to “begin to question our commitment to sound medium-term policy frameworks, with the result that interest rates would rise,” said the report.
Bloomberg/Reuters
Let's not forget the EU has requirements that budget deficits cannot get beyond 3% of GDP. Somehow Greece got to 12.7%. So who in Europe was minding the tore. Granted a recession should allow for greater short-term deficits but off by factor of 4X?
The fact that there was not much news suggests that the G7 should be disbanded and eliminate the policy noise.
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