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. Last Updated: 07/27/2016

G-7 Forecast Upbeat On Recovery in 2002

OTTAWA -- A drumroll of optimism rumbled through the corridors of a meeting of world financial leaders Saturday as policy makers dared to hope that the chances of growth and prosperity were starting to outweigh the risks.

In a statement weighted more toward the economic upside than to the still ever-present risks, finance ministers and central bank chiefs from the Group of Seven leading industrial nations -- the United States, Japan, Germany, France, Italy, Britain and Canada -- said they were more upbeat now than at their last meeting in October.

"We discussed the global economic outlook and the current slowdown. We are in agreement that we expect it to be short-lived," said Canadian Finance Minister Paul Martin, the chairman of the two-day meeting.

The meetings, held in and near Ottawa, took place to the clang of pots and pans banged together by small groups of anticapitalist demonstrators who say G-7 policies of free trade and open markets have done nothing to help the poor and are responsible for Argentina's troubles.

At one stage, protesters scampering across a frozen lake got to within shouting distance of the government retreat where the meeting took place. Others also trampled a large and obscene anti-G-7 message into the snow within clear sight of the ministers. But the protests were far smaller than at previous international gatherings, and the demonstrators were quickly turned back by police on snowmobiles.

The G-7, in language identical to that used in previous statements, also promised to monitor exchange rates and cooperate as appropriate. But they did not mention individual currencies by name, and officials said foreign exchange rates had not been a topic. "No country brought up the issue of currencies at the meeting today," said Japanese Finance Minister Masajuro Shiokawa.

Japan's yen has been sinking against other major currencies, prompting complaints from U.S. manufacturers and speculation that Japan actually likes the idea, while host nation Canada is worried about its currency's recent fall to record lows against the U.S. dollar.

Ministers admitted that the signs of strengthening economies seem to come mostly from North America, where both the United States and Canada appear to be shaking off the worst of a slowdown deepened by the crash in consumer confidence after the Sept. 11 attacks.

But even Europe appears to be looking up, and the head of the German central bank said he thought the worst was over for Germany. "There are not conclusive signs of a turnaround yet, but I think the whole picture justifies some cautious optimism," Ernst Welteke told a news briefing.

The main risks center on Argentina and Japan, both mired in recession, and on separate economic tracks that do not lead clearly and obviously to success.

Japan's seemingly endless recession is a major trouble spot, and Shiokawa promised action to stem a stock market slide that has brought Japanese stock prices to an 18-year low.

Another focal point of the discussions were efforts to choke of the flow of funds to terrorist groups like those held responsible for the Sept. 11 attacks on the United States. A G-7 statement promised tough measures to intercept money flowing through the global banking system, and cooperation between countries to prevent any repetition of the Sept. 11 attacks.