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G-8 talks up world economy
EVIAN, France (CNN) -- Leaders of the Group of Eight world powers expressed Monday confidence in the ability of the global economy to grow. U.S. President George W. Bush said the G-8 -- the United States, France, Britain, Germany, Italy, Canada, Russia and Japan -- discussed their "common desire" to grow their economies. Bush made the comment next to summit host French President Jacques Chirac, as the two continued to heal their rift over the war in Iraq. (Full story) But G-8 leaders were short on ideas to boost the global economy at the summit in the French spa town of Evian. Dr Razeen Sally from the London School of Economics told CNN. "These meeting don't produce concrete plans and are usually vague and open ended. Most of the work is done away from this meeting." In a communiqué, the G-8 pledged to complete trade liberalization talks by the end of next year but there was no mention on current trade disputes between the United States and Europe that had stalled negotiations. The European Union has banned the import of genetically modified produce -- Bush has said he would discuss the ban at the meeting. There was no reference to Chirac's call for rich nations to suspend subsidies on farm exports to Africa. Both the U.S. and Europe support their farmers through tax incentives and aid packages that lead to the overproduction of produce, which is dumped on poorer nations ruining livelihoods. "There is always hope that the European Union would do something to reduce agricultural subsidies," said Sally. "We can expect warm words and nothing else." U.S. officials had said Bush would urge Europeans to make their economies more flexible and scrap trade barriers. British Prime Minister Tony Blair told a press conference structural economic reform in Europe was the key to stronger growth. He said there was optimism that key European nations like France and Germany were tackling pension and welfare reforms needed to modernize their economies. The European Central bank is expected to cut interest rates on Thursday to boost the stagnating 12-nation eurozone economy. The move is also expected to counter the euro's strengthening against the dollar, which makes exports more expensive. (Full story) Italian Prime Minister Silvio Berlusconi said Bush told G-8 leaders he wanted a strong dollar. "Bush affirmed in a clear manner that the administration's intention is to have strong dollar... He did not exclude market fluctuations." Sally from the LSE said there was little in the way of coordinated action that the G-8 could take to boost the dollar. "Coordinated efforts to support currencies were a phenomena of the 80s. We can expect no action, clearly the U.S. has given up on a strong dollar policy."
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