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In the southern French city of Marseille, finance chiefs from the world’s top economies — the G7 — are meeting under heavy pressure to do more to revive flagging growth.
As they gathered US Treasury Secretary Timothy Geithner pressed Europe’s fiscally stronger countries to give “unequivocal” financial support to weaker euro zone states to overcome a debt crisis threatening the world economy.
Speaking in London, en route to France IMF chief Christine Lagarde called for bold action to get through a “dangerous new phase” of the recovery: “For the advanced economies, there is no question that fiscal sustainability must be restored. Policymakers, particularly in the monetary sphere, should stand ready, as needed, to take more action to support the recovery, including through unconventional measures.”
As the global economy slows and demand declines, hitting export-dependent countries like Germany, the financial markets are looking to the Group of Seven for some sign of a policy shift to boost growth.
Host country France has said it wants a coordinated response from the major industrial economies to counter mounting anxiety over Europe’s debt crisis and the fragility of its banks.