Europe > Western Europe > France > G-7 smoothes divisions, agrees on currency policy

France: G-7 smoothes divisions, agrees on currency policy

2013/05/13

G-7 finance ministers and central bank governors as well pledged Saturday their commitment to tackling tax evasion on the second of two days of talks in the English countryside, British Finance Minister George Osborne said.

The G-7 additionally vowed not to intentionally set out to weaken currencies, next the yen on Friday hit its lowest point against the dollar in additional than four years.

The United States has put pressure on European nations to scale back their spending cuts amid fears they may harm increase, but Osborne said the conference in Aylesbury, northwest of London, revealed much common ground.

“This conference confirmed there are additional areas of agreement between us on fiscal policy than is commonly assumed,” the Chancellor of the Exchequer told a press conference afterwards.

He said the G-7 had “discussed the importance of having in place credible, country-specific, medium-term fiscal consolidation plans for ensuring sustainable public finances and sustainable increase.”

French Finance Minister Pierre Moscovici appeared to echo Osborne's remarks.

“The consensus is gaining momentum in the way we balance support for increase and fiscal consolidation,” he told reporters.

“There is still a real will to reduce the deficits but certainly there is a change of tone” part G-7 members, Moscovici added.

The G-7 is meanwhile committed to “nurturing” world economic recovery, said Osborne.

“In general, our discussions over the completed two days have reaffirmed that there are still a lot of challenges to securing sustainable world recovery, and we can't take it for granted,” he said.

“But we are committed as the advanced economies in playing our part in nurturing that recovery and ensuring a lasting recovery so that we have prosperity in amount our nations.”

The talks, as well attended by top representatives from the European Union and International Monetary Fund, built on last month's wider Group of 20 conference while looking ahead to next month's G-8 summit in Northern Ireland. The G-7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States. The G-8 is the G-7 plus Russia.

The IMF has welcomed government efforts to cut spending but as well urged Britain to lessen the pace of its austerity program to support the country's fragile economic recovery.

On Friday, U.S. Treasury Secretary Jacob Lew said the world's biggest economy feels “strongly there needs to be the right balance between austerity and increase,” amid accusations that Germany has forced heavily indebted eurozone colleagues such as Spain and Italy down a path of deep spending cuts.

The G-7 as well used its new gathering to firm up its commitment to combatting tax evasion, which is illegal, and tax avoidance, which occurs at the same time as individuals and companies take chance of legal loopholes.

“Today, we amount acknowledge on the importance of collective action to tackle tax avoidance and evasion,” said Osborne.

Britain has made the issue a priority of its presidencies of the G-7 and G-8, and Osborne said: “It is vital that both developed and developing nations collect the tax that is due to them.”

The G-7 as well reaffirmed its commitment to reforming financial regulation.

“It is significant to complete swiftly our work to ensure no banks are too large to fail,” Osborne said.

“We as well agreed on the need for structural reforms to boost competitiveness of increase, inclunding new trade agreements,” he added.

G-7 Reacts to Market Rallies, Yen Weakness

The G-7 gathering took place against a background of renewed market focus on currency wars next the yen on Friday hit its new dollar low.

Osborne said the G-7 had reaffirmed its commitment made in February that its “fiscal and monetary policies have been and will remain orientated towards conference” its members' respective domestic objectives and “will not target exchange rates.”

The dollar this week vaulted completed the key 100-yen barrier for the prime time since October 2008, as Tokyo's aggressive stimulus efforts to lift the Japanese economy continue to depress its currency, helping to boost request for Japanese exports.

“We are not manipulating the foreign exchange market but trying approaching out of deflation,” Japan's Finance Minister Taro Aso insisted on Friday, at the same time as the U.S. currency raced as high as 101.98 yen

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