Russia works out anti-crisis measures with G7
They have agreed to a five-point plan in an attempt to alleviate the difficulties which continue to get worse.
The group vowed to protect major banks from failure and promised to get credit back into the system by buying up stakes in financial institutions.
Putting their differences aside, Russia and the U.S. are uniting to face the global financial storm together. World Bank Chief Robert Zoellick and the Russian Finance Minister discussed the economic chaos in a 20-minute closed door bilateral meeting.
Amid the turmoil, Aleksey Kudrin pledged $US 32 million towards international financial literacy programs in developing countries. But advanced countries are also turning to Russia to help aid the crippling world economy.
“Over the past months, Russia has taken a number of steps even before other countries took similar steps,” said Kudrin. “For instance, we made a decision concerning guarantees for the interbank market earlier than, say, the United Kingdom, which is currently being viewed as a model.”
In an about turn, the U.S invited Russia to participate in a dinner with the Group of Seven industrialized nations and a second gathering with President Bush on Saturday.
The meetings are usually confined to member states only. Kudrin says Moscow's participation changes the format of the event and it may eventually change the architecture of the group.
Zoellick is calling for the G7 to be expanded to 14 – including other key economic players like Russia, Brazil, China and India.
Several members of the current G7 – including Germany and France – have blamed the U.S for infecting the globe with a financial disease. The group committed to an action plan Friday that includes recapitalising banks, insuring deposits and government guaranteed short-term interbank lending.
The U.S. says more needs to be done and quickly.
“Never has it been more important to find a collective solution to ensure stable and efficient financial markets and restore the health of the world economy,” U.S. Treasury Secretary Henry Paulson said.
Working to restore the confidence of U.S. citizens, President Bush delivered another national television address. He promised the economy will stabilise, but failed to answer when.
As the international community works to rebuild the ailing economy, experts believe the American brand will continue suffering.