MARSEILLE, France (MNI) – The Group of Seven finance ministers and
central bank governors issued the following statement late Friday night
after meeting here:

“We met at a time of new challenges to global economic recovery,
with significant challenges to growth, fiscal deficits and sovereign
debt, stemming from past accumulated imbalances. This is reflected in
heightened tensions in financial markets. There are now clear signs of a
slowdown in global growth.

We are committed to a strong and coordinated international response
to these challenges. We are taking strong actions to maintain financial
stability, restore confidence and support growth. In the US, President
Obama has put forward a significant package to strengthen growth and
employment through public investments, tax incentives, and targeted jobs
measures, combined with fiscal reforms designed to restore fiscal
sustainability over the medium term.

Euro area countries are implementing the decisions taken on July 21
to address financial tensions, notably through the flexibilisation of
the EFSF, reaffirming their inflexible determination to honor fully
their own individual sovereign signatures and their commitments to
sustainable fiscal conditions and structural reforms. Japan is
implementing substantial fiscal measures for reconstruction from the
earthquake while ensuring the commitment to medium-term fiscal
consolidation.

Concerns over the pace and future of the recovery underscore the
need for a concerted effort at a global level in support of strong,
sustainable and balanced growth. We must all set out and implement
ambitious and growth-friendly fiscal consolidation plans rooted within
credible fiscal frameworks. Fiscal policy faces a delicate balancing
act. Given the still fragile nature of the recovery, we must tread the
difficult path of achieving fiscal adjustment plans while supporting
economic activity, taking into account different national circumstances.

Monetary policies will maintain price stability and continue to
support economic recovery. Central Banks stand ready to provide
liquidity to banks as required. We will take all necessary actions to
ensure the resilience of banking systems and financial markets. In this
context we reaffirm our commitment to implement fully Basel III.

We reaffirmed our shared interest in a strong and stable
international financial system, and our support for market-determined
exchange rates. Excess volatility and disorderly movements in exchange
rates have adverse implications for economic and financial stability.

We will consult closely in regard to actions in exchange markets
and will cooperate as appropriate. We look forward to working with our
colleagues in the G20 and the IMF in the coming weeks to rebalance
demand and strengthen global growth. As previously agreed, structural
reforms will make an important contribution in this regard.”

–Paris newsroom, 331-42-71-55-40; bwolfson@marketnews.com

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