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Germany says substantial response to crisis coming from G7

Other News Materials 8 April 2008 22:38 (UTC +04:00)

( dpa ) - A "substantial" response from the G7 nations to the economic turmoil rippling out from the US credit crisis can be expected from this weekend's Group of Seven meeting in Washington, a senior German official said Tuesday.

Thomas Mirow, state secretary at the Finance Ministry in Berlin, said he was expecting "a high degree of agreement" on short- and long-term actions that would be mainly based on final recommendations from the financial stability forum of the industrialized nations.

"I am sure there will be a very convincing, substantial, joint response" from the G7 to the effects of the financial market crisis, he said.

The G7 finance ministers are to confer during the spring meeting of the International Monetary Fund (IMF) in Washington.

Mirow said the response would involve better management of liquidity and risks and greater transparency. Ministers would also discuss under-capitalized transactions and how national regulators cooperated.

There had been "some very sensible proposals" which could be put into practice very quickly, he added.

"The ministers are not going to expose themselves to the accusation of having met with nothing concrete to show for it," he said. The G7 represents the United States, Germany, Japan and other major economies.

Germany supported IMF plans to sell gold as well as proposals to alter vote weightings at international financial bodies, he said, adding that he expected a majority this weekend in favour of both.

A realignment of votes would mainly benefit emerging and developing economies, with 153 nations gaining in influence. Germany's weight would be slightly reduced, from 6.0 per cent before the reform to 5.8 per cent afterwards.

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