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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 "Buy American" clause in Washington's stimulus plan and the national car aid plans in France and Italy.
According to the joint agreement, the world is facing its worst financial crisis for 50 years and leading industrialized 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 "open trade and investment policies which are essential to economic growth and prosperity."
The United Stated also urged "exceptional measures" from the partner-countries in order to ease the financial markets' turmoil. The G7 ministers also stressed the need to support developing countries to prevent the world's poorest from being the biggest losers in the financial downturn.
The rich and developing countries must strengthen their cooperation in better regulation and supervision of banks and markets.
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