In their latest efforts to resolve the growing debt crisis in Europe, G7 agreed that they needed to act together. Unfortunately, this appears to be where their efforts ended. There has been no decision made on just ‘how’ they should act even though they unanimously agree that action is indeed called for.
In a statement released just after the meeting, the Group of Seven stated that they are facing new challenges to fiscal deficits, growth and the ever-present sovereign debt. It is clear to them that the global economy has slowed down so they reiterated their commitment to a ‘coordinated response.’ The problem is, to date that response has not given rise to action.
Curiously, the group who maintain their commitment to facing the problems couldn’t agree on how to release a communiqué. France held out for a joint release whilst Germany felt that each government should release its own statement as they were lacking sufficient common grounds.
The group reaffirms a shared interest in stabilising the international economy and their support of exchange rates that are market driven. They stated that they would act and cooperate as needed in the exchange of currencies which should further help to stabilise the global financial system.
Perhaps their biggest duty at the moment was to calm the growing fears of another global debt crisis amongst world leaders and in the financial markets. There has been much speculation that we are in for a double dip recession which is why their concerted efforts are called for at this time.
In the end, no actual decisions were made on how to act because the problems they are confronting are so broad and varied that there is no single solution. As the French finance minister so aptly said it, the need to get away from the notion that there is “one solution for all.”
