- The Washington Times - Saturday, February 14, 2009

ROME | The job of the Group of Seven finance ministers who are meeting about solutions to the financial crisis looked even more difficult on Friday as new economic data showed Europe’s recession deepening.

The German economy, Europe’s engine, plunged by 2.1 percent in the fourth quarter compared with the previous quarter in the sharpest downturn since the country reunified in 1990, and fellow Group of Seven members Italy and France also reported sharp downturns of 1.8 percent and 1.2 percent, respectively.

German Finance Minister Peer Steinbrueck told reporters at a downtown Rome hotel, where he was meeting with new U.S. Treasury Secretary Timothy F. Geithner, that the decline had been in line with his expectations.

British Chancellor of the Exchequer Alistair Darling was more blunt, calling the current troubles “the severest downturn in generations.”

The meeting, which began with dinner Friday and was continuing with a daylong session on Saturday, marks Mr. Geithner’s international debut.

Officials from the leading industrial nations will discuss new financial-markets rules, concerns about protectionist measures in stimulus plans and the effect of the crisis on poorer countries. But a major breakthrough would be a surprise, with the meeting coming ahead of a broader, 20-country summit in April.

Protectionism was emerging as a major worry amid fears that the crisis would lead countries to close off their borders to free trade, in a repeat of the 1930s. It’s especially worrisome to Germany, a major exporter.

“If you are taking money from your taxpayer to bail out a car company, your taxpayer will say, ‘I want it spent at home.’ But the whole nature of this problem is that this will worsen it instead of addressing it,” World Bank President Robert Zoellick said at a meeting of Italy’s bankers’ association.

The echo of the global slowdown could be felt on the streets of the Italian capital, with tens of thousands of workers and laid-off employees staging demonstrations against the government’s handling of the crisis.

Mr. Geithner arrived Friday morning with Federal Reserve Chairman Ben S. Bernanke and spent the day in one-on-one meetings with his counterparts from Britain, Canada, Italy, Germany and Japan - saving a one-on-one with the French finance minister for her visit to Washington next week.

Mr. Geithner also met with Russian Finance Minister Alexei Kudrin, in Rome for the G-7 event.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide