G7 Ministers Blame Each Other for World Slowdown By Mike Dolan ROME (Reuters) - Finance ministers of the Group of Seven nations gathered for a one-day meeting in Rome on Saturday amid divisions between the United States and Europe over who is most to blame for the ailing global economy. Ministers, convening in the 16th-century Villa Madama overlooking Rome, will map out the economic and financial agenda for the July 20-22 summit of G7 leaders in Genoa. But disagreement has broken out over which country or region needs to do most to help the world recovery, amid anxiety in world financial markets about the chances of a rebound in business activity and confidence this year. Europeans are determined not to be singled out for criticism while the United States insists it has done nearly all it can to revive global activity. Germany and France reacted sharply to U.S. suggestions they were not taking on what Treasury Secretary Paul O'Neill described as a ``locomotive role'' in the world economy. German Finance Minister Hans Eichel, speaking to the press before the G7 meeting later on Saturday, said it was ``nonsense'' to suggest Germany was at risk of entering a recession and that there were a number of positive signs for Europe's largest economy. ``In the triad,'' Eichel said, referring to the United States, Japan and the euro zone, ``the euro zone is still the strongest part although it is now showing a clear slowdown.'' He said the United States was experiencing a far stronger slowdown and that Europe had already done its part with major tax cuts that came into force on January 1 -- well before the United States implemented its own tax cuts. FINGER POINTING Eichel's comments echoed those of French Finance Minister Laurent Fabius, who issued an unusually blunt pre-meeting statement on Friday saying the United States was the main cause of global economic slowdown. ``We have to look at the essentials, and there are two,'' he said. ``The main origin of the current slowdown is the American slowdown, and the rise in oil prices.'' The spat comes amid renewed volatility on global financial markets and concerns about how slow the U.S. economy has been to react to the Federal Reserve's six interest rate cuts this year and the Bush administration's $1.35 trillion tax-cut program. The European Central Bank's reluctance to cut interest rates because of above-target inflation was also a growing concern outside Europe. Japan's plan to stimulate its moribund economy with banking and fiscal reforms still needs to be tested. O'Neill came to the meeting convinced U.S. tax and interest rate cuts, aimed at averting a full-blown recession in the world's largest economy, have not been matched by aggressive growth-boosting policies from all his G7 partners. ``We are...doing our part to contribute to strong and stable growth worldwide,'' O'Neill said on Thursday before departing for Rome. ``Europe and Japan...can play a locomotive role and they need to play a locomotive role as well.'' Tom Walker Bowen Island, BC 604 947 2213
