Japan’s Kan Says G-7 Discussed European Nations’ Sovereign Risk

Feb. 6 (Bloomberg) -- Japanese Finance Minister Naoto Kan said late yesterday that Group of Seven nations talked about Greece’s fiscal health and the Chinese economy.

“Interest in Spain, Portugal, especially Greece was stronger than I expected as many of the participants are from Europe and the IMF,” Kan told reporters after the meeting of G-7 finance chiefs in Iqaluit in Canada. “I felt strong interest for the Chinese economy but, on the other hand, there was atmosphere to avoid a deep discussion about it.”

The euro fell to an almost one-year low against the yen and to the weakest level in more than eight months versus the dollar yesterday on concern that budget deficits in Greece and other European nations will hamper the region’s growth. Fiscal health was discussed at the meeting as each participant has the same problem with different volume, Kan said.

If there was an Olympic competition on the size of debt, “Japan will win a gold medal without a doubt,” Kan said, adding the nation with the world’s largest public debt will start to discuss how to contain it after passing next fiscal year’s budget by the end of March.

France Finance Minister Christine Lagarde handed out a document with suggestions for the future of G-7 meetings, Kan said. The finance ministers discussed various possibilities, including whether they should meet before or after Group of 20 meetings, Kan said.

To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

To contact the editors responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net; Andrew J. Barden at barden@bloomberg.net