G-7 Discusses Potential Fiscal Measures If Growth Falters

Canadian Finance Minister Jim Flaherty
Jim Flaherty, Canada's finance minister. Photographer: Andrew Harrer/Bloomberg

Some Group of Seven nations raised the possibility of extra fiscal measures if the global recovery weakens, Canadian Finance Minister Jim Flaherty said after a G-7 meeting in Tokyo yesterday.

“There has been some discussion by some of the participants along those lines, generally relating to the European situation,” Flaherty said on a conference call with reporters today. “The continent is in recession and there’s rising unemployment.”

Europe’s woes are at the center of this week’s meetings of the World Bank and International Monetary Fund in Tokyo as finance chiefs work to sustain a flagging global recovery. The Washington-based lender said this week that failure to remedy them was helping to generate an “alarmingly high” risk of a steeper slowdown.

Flaherty also said it’s worth considering proposals by IMF Managing Director Christine Lagarde to give Greece and other troubled European countries more time to meet fiscal targets.

“I think it’s certainly worth considering,” Flaherty said. “The challenge in Europe now is the European economy is in a recession and there is some interest in trying to create some economic growth in the euro zone.”

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