WASHINGTON, Oct. 7 (UPI) -- Finance officials from the world's richest nations agreed to continue cooperating closely to choke the source of terrorist funding late Saturday, but they failed to come up with any specific cure for the ailing global economy.
"We met today to discuss international efforts to combat the financing of terrorism and to address the impact of last month's terrorist attacks on the global economy," they said in a one-page statement concluding the two-day meeting of finance ministers and central bank governors of the United States, Britain, Japan, Germany, France, Italy and Canada.
While officials agreed that the terrorist strikes on New York and Washington last month has had, and indeed would continue to have, a negative impact not just on the United States but worldwide, they emphasized that growth was likely to pick up in the medium term.
"Last month's terrorist attacks could delay the resumption of strong growth in our economies. Decisive action has already been taken to support a robust recovery. Notwithstanding remaining short-term uncertainties, we are confident about our future prospects," the G7 statement said.
U.S. Treasury Secretary Paul O'Neill, who chaired the meeting representing the host country, told reporters, "I think the important thing is that we agreed that we should all be doing the things that are appropriate and meaningful in the context of our individual economies to bring them forward at as fast a rate as we can."
He did not, however, elaborate further on what measures would likely prove effective as the world economy faces its most difficult period in recent years.
To be sure, G7 nations have been strongly united behind the United States' efforts to try to cut off funding to terrorist organizations, and financial agencies from all member states have been cooperating closely since the attacks to cease the international financial flow to terrorist organizations believe to have links to those who carried out the Sept. 11 strikes.
They have been less successful, however, in seeking a common solution to keep the global economy from stagnating still further. The central banks of member countries all eased monetary policy the week after the attacks in order to ensure global liquidity and the statement suggested a similar coordinated effort could happen again if circumstances demanded it.
"We are strongly committed to bringing forward needed measures to increase economic growth and preserve the health of our financial markets. We will continue to monitor exchange markets closely and cooperate as appropriate," the statement stated.
There was no mention of new joint interest rate cuts nor was there any mention of concerted efforts to prop up the U.S. dollar.
Indeed, at a press conference following the meetings, the European Central Bank President Wim Duisenberg expressed cautious optimism about a moderate recovery by next year, but he suggested that the ECB would not cut interest rates further any time soon.
Meanwhile, Japan's finance minsiter Masajuro Shiokawa said flat out at a post-meeting briefing that G7 member countries "did not talk about concerted intervention'" in the foreign exchange market, even though Japan would like to see the dollar stronger so that its goods could be more competitive in overseas markets.
Nor was there any mention of boosting government spending as a means to spur growth, a step the United States is taking as the Bush adminsitration presses Congress for an economic stimulus package totaling up to $75 billion.
But O'Neill stressed that the U.S. policy would get the country's economy back on track, if not doing the same for global growth.
"In the case of the United States, I'm very comfortable that we're doing the right thing," he said.
Meanwhile, financial officials from Russia also took part in some parts of the meeting relating to emerging markets. Group of Seven member countries pointed out that the spillover effect of the terrorist attacks go far beyond just the borders of industrialized nations.
"Emerging market and developing economies have felt the effects of the slowdown in our economies and could be affected by uncertainty following last month's terrorist attacks. The prospects of the poorest countries could be damaged, and we will take the necessary steps to mitigate these impacts. Those countries adversely impacted by recent developments should also create the conditions for strong economic growth and sustained private capital flows, and the international financial institutions stand ready to assist," the joint statement said.
Russia was the only country specifically mentioned in the brief statement, as G7 officials concluded: "We welcome Russia's continued economic growth, progress on reform, and ratification of new anti-money laundering legislation. We look forward to additional progress in the financial sector and to an improved investment climate to help sustain growth throughout Russia."
