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8 Jul, 2009 07:23

G8 leaders to renew tackle on economic downturn

G8 leaders meet in Italy on Wednesday, with key decisions needed on food security, financial regulation, and climate change. But, the ongoing economic crisis will be the major challenge under consideration.

This time it’s all about aftershocks – literally and metaphorically. From the decision to move the summit to quake-stricken L’Aquila in an effort to boost the region’s economy and reconstruction, to the more challenging task of dealing with the aftermath of the economic crisis. Italian Foreign Affairs Minister, Franco Frattini, is looking for agreement on how to come out of stimulus measures bought in to fend off a deeper economic downturn.

”Many, many countries in the world have been increasing their public spending in order to face the crisis and help industrial sectors in need and this is leading to increasing public debt, which is another source of great concern. So, an exit strategy and how to face the crisis in the same time will be on the table.”

But with G8 nations weathering the biggest economic slump since the great depression of the early 1930s, a large part of the summit is expected to renew a focus on global financial regulation. Russian presidential aide, Arkady Dvorkovich, says Russia will be pushing for new financial and economic architecture.

“Our main focus will be to discuss the ways out of the crisis and international cooperation in this field. We will also emphasise the need to create a new financial and economic architecture.”

This year’s event will see a vast sideline programme, with the most anticipated prospect a push for a conclusion to the Doha round of the WTO talks to revive the world economy. At least the G8 leaders have a few things they won’t have to worry about. The oil price is below half its high point last year, and inflation is the last thing on anyone’s mind, although the prospect of both jumping at the first sign of a sustained economic turnaround, will lend a note of caution.