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No Specifics Yet, But G-7 Nations Pledge Action On Economy

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By JOSEPH COLEMAN, The Associated Press

Published: February 10, 2008

TOKYO - The world's top economies on Saturday promised coordinated action to restore confidence in global markets as financial turmoil slows U.S. growth, but with each country having different priorities, they didn't offer a specific remedy.

The Group of Seven industrialized countries warned of risks in the troubled American economy and housing sector, but leavened that with assurances that the world's biggest economy would grow this year, albeit at a slower pace.

World financial markets have been battered amid worries about a possible U.S. recession and uncertainty about the subprime mortgage crisis that has led to billions in losses at major banks.

A main thrust of Saturday's meeting was to reassure the world that the United States isn't in recession.

"I believe that we're going to keep growing," U.S. Treasury Secretary Henry Paulson said. "If you're growing, you're not in recession."

The officials - from the United States, Japan, Germany, France, Britain, Italy and Canada - pledged to take actions individually and together to "secure stability and growth in our economies," but without outlining specifics.

The G-7 had faced calls for increased coordinated action to deal with the U.S. housing problems in subprime mortgage loans, financial market turmoil, heightened inflation expectations, and high oil and commodity prices.

Paulson, however, dismissed speculation that Washington had encouraged its trading partners to follow the U.S. lead to boost demand by cutting interest rates and offering tax rebates.

"Every country's different ... and every country needs to focus on their own economic situation," he told reporters after the meeting.

While the United States was focused on fueling growth, European Central Bank President Jean-Claude Trichet said that his main goal was avoiding inflation.

"We will do whatever we need to do to be credible in maintaining price stability in the medium term," he told reporters after the meeting.

He added that European economies basically are sound despite uncertainty sown by volatile financial markets.

The instability in exchange rates - particularly the fall of the dollar and strength of the euro - has been a growing concern around the globe. But the group shied away from an expanded statement on currencies, only saying that excess volatility was undesirable.

The finance ministers also reiterated a call for China to allow the yuan to rise.

Still, the signs of slowdown in the United States are severe.

The government recently reported that the economy shed 17,000 jobs in January, the first monthly job loss in more than four years. Growth slowed to an anemic 0.6 percent in the final three months of last year.

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