G-7 Ministers Endorse U.S. Stimulus Plan
JACKI LYDEN, host:
Treasury Secretary Timothy Geithner took to the international stage today, meeting with finance ministers from the group of southern industrial countries in Rome. Geithner and the other G7 ministers from Japan, Germany, Britain, France, Italy and Canada endorsed economic stimulus and vowed to combat a resurgence of protectionism.
NPR's Sylvia Poggioli reports from Rome.
SYLVIA POGGIOLI: The U.S. plan to tackle the recession and the banking crisis got a better reception abroad than at home. The G7 joint statement unanimously endorsed the Obama administration plan. In the lead up to the Rome meeting, several European countries had expressed concern over the specter of protectionism, in particular, the buy America clause in the U.S. stimulus package.
Treasury Secretary Timothy Geithner was quick to reassure the other members of the club.
Secretary TIMOTHY GEITHNER (Department of the Treasury): The president reacted to those concerns and to those provisions very quickly. And the provisions that came out of the Congress must be implemented in a way consistent with our international obligations.
The president, in fact, is deeply committed to sustaining an important commitment to maintaining open trade and investment policies. And I heard countries around the table today, as you've heard, and publicly around the world, similar commitments by the governments. I just want to emphasize how important that is for confidence at this critical moment.
POGGIOLI: The latest data shows the recession in Europe is deepening. The Eurozone shrunk 1.5 percent at the last quarter of 2008, the deepest contraction on record. The finance ministers agreed that what started as financial turmoil has now gripped the real economy and spread throughout the world. And the severe downturn is expected to persist through most of 2009.
Some European leaders blame what they call Anglo-Saxon-style (unintelligible) capitalism as the key culprit of the global economic crisis. And the G7 endorsed the creation of a framework of common principles and standards on propriety, integrity and transparency of international economic and financial activity.
In response to a question whether if United States would agree to strict regulations for hedge funds and derivatives, Secretary Geithner said the U.S. is studying a comprehensive reform of financial system, including a stronger oversight of banks and other institutions critical to market stability.
Sec. GEITHNER: That's not going to be sufficient. We're also going to have to bring much more effective enforcement. And we're all going to need stronger powers to deal with. The financial crisis help manage the resolution of financial crisis.
POGGIOLI: The G7 Summit did not produce major new initiatives, and many analysts say it's been overshadowed by the new G20 that includes China and India, and that meets in April. But this was an important get-to-know-each-other with the new American Treasury secretary. After years of American unilateralism, the other members were certainly relieved by Geithner's promise of a more multilateral approach from Washington.
Sec. GEITHNER: That said, we very much want to work alongside the rest of the world because what we do will not be fully effective unless the world as a whole is moving together to address what a very common challenge is.
Sylvia Poggioli, NPR News, Rome.