WASHINGTON, April 15: Senior finance officials from the Group of Seven industrialized nations open talks here later Friday facing sharp differences on how to galvanize global growth and attack crippling poverty in the developing world. Finance ministers and central bankers from Britain, Canada, France, Germany, Italy, Japan and the United States, who will issue a statement on Saturday, are also worried about the impact on economic momentum this year of stubbornly high oil prices.
But despite its diplomatic and financial clout, the G7 is essentially powerless to influence energy markets, economists say, especially at a time when the Organization of Petroleum Exporting Countries has little spare capacity and as non-OPEC producers are pumping at near maximum levels.
France has been urging energy conservation and diversity but has so far failed to win much support for the initiative within the G7.
A senior French official, asking not to be named, has said the idea has found little favour in the United States and Canada.
“National interests are blocking what we see to be the general interest,” he said. “I doubt there will be as ambitious an accord (on oil) as we would like.”
The official also bristled at suggestions by US finance chiefs that Washington’s huge current account deficit, a broad measure of foreign trade, is attributable to sluggish growth in Europe and Japan that prevents consumers there from buying US products.
The current account shortfall unnerves US trading partners, as well as the leadership of the International Monetary Fund, because it raises fears that foreign investors will lose confidence in the United States and begin to shun US assets.
That could further weaken the dollar in a disorderly manner, prompting the US Federal Reserve to raise interest rates at a pace that would threaten global growth.—AFP
