Bush: US and allies united on crisis
Agence France-Presse | 10/12/2008 12:23 AM
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WASHINGTON - US President George W. Bush said Saturday the world's richest economies were united on a "serious global response" to the financial meltdown, as the eurozone countries prepared for a crisis summit.
"We will stand together in addressing this threat to our prosperity. We will do what it takes to resolve this crisis. And the world's economy will emerge stronger as a result," he said.
Bush unveiled no new proposals after meeting with finance ministers from the Group of Seven (G7) countries and the heads of the International Monetary Fund (IMF) and the World Bank for about 40 minutes, but promised a united front.
"All of us recognize that this is a serious global crisis and therefore requires a serious global response for the good of our people," the US president said. "We're in this together, we'll come through it together."
The finance ministers, from Britain, Canada, France, Germany, Italy, Japan, stood in silence somberly behind Bush, who spoke in the White House Rose Garden in front of fluttering flags from the seven countries.
Bush warned against any "beggar-thy-neighbor" policies like those blamed for deepening the Great Depression of the 1930s, including steps that choke off global trade.
"There have been moments of crisis in the past when powerful nations turned their energies against each other, or sought to wall themselves off from the world," he said. "This time is different: the leaders gathered in Washington this weekend are all working towards the same goals."
Bush also said the G7 would work with an enlarged forum known as the Group of 20 that includes other major economies like China, India and Russia, which was also set to hold crisis talks in Washington Saturday.
In Europe, French President Nicolas Sarkozy and German Chancellor Angela Merkel met Saturday in France, the day before a Paris summit of the leaders of the 15 eurozone economies as well as British Prime Minister Gordon Brown.
The heads of the eurozone's two biggest economies are seeking a joint response to the crisis, which may include a British-style plan of partial bank nationalization.
"We are analyzing the crisis together. Germany and France have perfectly identical views on the consequences to take from that for the short, medium and long term," the French leader said.
Merkel agreed Paris and Berlin were "on the same path as regards putting in place a concerted and coherent reaction for the eurozone" but noted that within this there was "naturally room for maneuver for each member state".
The G7 talks in Washington followed another day of massive falls on the markets Friday as investors rushed to the exits, increasing the pressure to come up with a convincing accord.
Analysts said, however, the five-point action plan set out by the G7 ministers had nothing that would calm the markets and so allow a more measured approach to the problems thrown up rather than the crisis mode of the past few weeks.
The G7 talks came ahead of Saturday's annual meetings of the IMF and World Bank, which are under pressure to tackle the global financial crisis and minimize its impact on the world's poor.
"As we meet today, risks to the global economic environment are the most serious and challenging in recent memory," US Treasury Secretary Henry Paulson told the IMF meeting
After the G7 talks on Friday, Paulson announced that the US government was ready to invest directly in banks for the first time since the 1930s depression in a bid to restore confidence.
Britain took a similar step on Wednesday, saying it would guarantee interbank lending and offered to take stakes in some of the country's biggest banks in a program of partial nationalization.
Countries in Europe's single-currency zone seemed poised to follow Britain's example.
"It's very likely, because European banks are also under-capitalized," French Finance Minister Christine Lagarde said in a French radio interview Saturday.
Since the collapse of the US subprime or higher-risk home loan market last year, banks have been saddled with mountains of bad debt, undercutting their finances and making them unwilling to provide any but the safest loan, including to each other.
Global stock markets went into a freefall Friday -- some plunging 10 percent in the worst showing since the 1987 crash -- even though Wall Street stemmed the losses in a session of ups and downs.
