By Roger Runningen and Steve Scherer July 8 (Bloomberg) -- Group of Eight leaders said they will delay reversing stimulus measures until an economic recovery is assured and will decide on their own exit strategies individually, according to a draft statement.
“Once a recovery is assured, we have agreed on the need to prepare appropriate strategies to reduce the extraordinary measures taken in response to the crisis,” said the draft, which was read to reporters by a G-8 official as the leaders gathered in L’Aquila, Italy. The exit strategies “will vary from country to country, depending on domestic economic conditions and public finances and to assure a sustainable recovery in the long term.” While some policy makers have expressed optimism that the global recession may be easing, reports indicate any recovery is likely to be slow. The World Bank on June 22 cut its outlook for this year, forecasting that the global economy will contract 2.9 percent, compared with a previously projected 1.7 percent. In mid-June, G-8 finance ministers meeting in Lecce, Italy, concluded that it was time to begin drafting contingency plans for rolling back budget deficits and bank bailouts as the economy shows signs of recovery. They also said it was premature to rein in more than $2 trillion in stimulus packages. Economy Unstable An aide to President Barack Obama<http://search.bloomberg.com/search?q=Barack+Obama&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>said earlier today that the global economy remained unstable and that it was too soon to begin withdrawing stimulus programs. “There is still uncertainty and risk in the system,” Mike Froman<http://search.bloomberg.com/search?q=Mike%0AFroman&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1>, deputy National Security Adviser, told reporters at a briefing in L’Aquila, at the summit of the world’s industrial powers. He said the G-8 declaration would strike a “a balance” and reflect the G-8 leaders’ “consensus view” that exit strategies can be prepared but that it’s not “time to put them into place.” “There will be discussion that there is still uncertainty and risk in the system but that it’s also important to return to fiscal sustainability in the midterm, and that sort of balance will be struck, most likely with the leaders as well,” Froman said. Obama arrived in Italy today from Russia where he met President Dmitry Medvedev and Prime Minister Vladimir Putin. He met Italian President Giorgio Napolitano in Rome before traveling to L’Aquila. More U.S. Stimulus President Obama has left the door open to a second stimulus package after the first one for $787 billion was signed into law in February. Obama underscored the dilemma of either boosting an already record budget deficit or letting unemployment climb. In an interview with ABC News yesterday, he said unemployment approaching 10 percent is something “we wrestle with constantly.” He added that spending more borrowed money is “potentially counterproductive.” The Obama administration’s refusal to rule out a second spending package doesn’t complicate matters for other G-8 leaders, said Froman, 46. “Every country will evaluate its own situation and its own capacity and need for action,” he said. The G-8 as a whole agrees that it’s important “to come out of this with a balanced and sustained growth, that we take the necessary actions to do so.” The members of the G-8 are Canada, France, Germany, Italy, Japan, Russia, the U.K. and the U.S. Other participants at this week’s meetings include Brazil, China, India, Mexico, South Africa, Egypt and several other nations from Asia, Africa and Europe. The summit concludes July 10. http://www.bloomberg.com/apps/news?pid=20601087&sid=a3DwYIcm_VnI -- National Youth Day Dr APJ Abdul Kalam speech http://www.youtube.com/watch?v=k-O24qidjj0&feature=related --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
