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World financial leaders focusing on budget crises

06 February 2010 18:10 (UTC +04:00)

Baku â€“ APA. A crisis in Europe over budget belt-tightening has upended global markets and seized the attention of financial leaders meeting in the Canadian Arctic, APA reports citing â€œAssociated Pressâ€.

Finance ministers and central bankers from the Group of Seven major industrial countries also planned to try on Saturday to settle differences on banking industry changes. There are fears that go-it-alone moves such as President Barack Obama’s plan to break up big banks will further hamper the fledging economic recovery.

Canadian Finance Minister Jim Flaherty hoped his choice of the remote town of Iqaluit, population 7,000, where temperatures can dip to 40 degrees below zero in February, would make officials focus on the task ahead.

The United States was represented by Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke. The G-7 consists of the United States, Japan, Germany, Britain, France, Italy and Canada.

The agenda Saturday included developments in the global economy, banking reform and proposals for more debt relief to Haiti, recovering from a devastating earthquake. A closing news conference was set for the afternoon.

Developments in Europe provided a sobering reminder that G-7 policymakers still face major hurdles in repairing a broken global economy.

Obama presented a budget plan this past week that would boost job-creation efforts and raise the U.S. budget deficit to a record $1.56 trillion this year. British Prime Minister Gordon Brown is also stressing government stimulus even though critics point out that the country’s budget deficit as a share of its gross domestic product could reach 12 percent this year.

In Japan, where the economy has struggled for two decades, the government unveiled more stimulus spending last week.