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LEAD: Greece's debt issue dominates G-7 finance chiefs' talks.

WASHINGTON, April 23 Kyodo


Top finance officials from the Group of Seven major economies devoted most of the time during their talks Thursday to Greece's debt problems, highlighting how much they are concerned about the issue and its impact on other parts of the global economy.

''Most of the talks were spent on Greece's problems,'' Japanese Finance Minister Naoto Kan told reporters after the meeting, adding that there was no time to discuss the Chinese yuan's valuation or financial reform, topics that had also been supposed to figure prominently.

Kan said his European colleagues wanted Japan and the United States to support Europe's attempts to rescue Athens, although there was no request for financial help.

The dinner meeting of G-7 finance ministers and central bank governors came after the European Union said Greece's towering budget deficit in 2009 was bigger than anticipated and Moody's Investors Service downgraded its already battered debt.

As the finance minister of a country whose state debt is approaching 200 percent of gross domestic product, Kan said Japan ''should learn a lesson'' from Greece's debt woes. ''I thought we have to be really steady'' in restoring Japan's fiscal health, he said.

The ratio of Japan's fiscal debt to GDP is the worst among the G-7 countries -- Britain, Canada, France, Germany, Italy, Japan and the United States.

Kan said he briefed other G-7 participants about Japan's accelerated efforts to improve its fiscal situation as it intends to compile a medium-term fiscal rehabilitation plan in June.

The G-7 gathering also took place at a time when the global economy is recovering from the financial crisis on the strength of China and other emerging economies.

At the outset of the meeting, International Monetary Fund Managing Director Dominique Strauss-Kahn told G-7 participants that the world is seeing the economy gaining traction stronger than once thought, Kan said.

The G-7 gathering did not release a joint communique nor hold a joint press conference on the content of the meeting as participants intend to focus on holding candid and substantive discussions.

The G-7 omitted a joint communique at its previous meeting in February in Iqaluit, Canada, for the first time in over a decade, and inherited the new character of informality this time.

The traditional gathering of the G-7 financial chiefs has been replaced by a meeting of the Group of 20, which consists of the G-7 plus emerging powerhouses such as China. The G-20 evolved into the ''premier'' global economic forum last September when its leaders met in Pittsburgh.

The G-7 forum had been instrumental in steering the global economy in recent decades, but has increasingly been seen as too small to address global concerns with developed countries pummeled by the financial crisis while China and other developing countries emerged as influential economic players.

The G-20 countries will hold a one-day meeting on Friday to compare notes on a host of issues, with tighter financial regulations likely to be high on the agenda.

The issue surrounding the value of the Chinese yuan is not set as an official item on the agenda. But G-20 finance chiefs may eventually take it up in the context of their efforts to correct global imbalances.

From Japan, Bank of Japan Governor Masaaki Shirakawa also took part in the G-7 meeting and is to attend the G-20 gathering.
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Publication:Japan Policy & Politics
Date:Apr 26, 2010
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