G7 smooths divisions over growth, deficit reduction

AYLESBURY: The Group of Seven advanced economies on Saturday appeared to smooth over US-European differences on how to balance deep austerity measures with ways to support fragile growth. G7 finance ministers and central bankers also pledged their commitment to tackling tax evasion during two days of talks in the English countryside, British finance minister George Osborne said.

The United States has put pressure on European nations to scale back their spending cuts amid fears they may harm growth, but Osborne said the meeting in Aylesbury, northwest of London, revealed much common ground.

"This meeting confirmed there are more areas of agreement between us on fiscal policy than is commonly assumed," the chancellor of the exchequer told a press conference afterwards.

He said the G7 had "discussed the importance of having in place credible, country-specific, medium-term fiscal consolidation plans for ensuring sustainable public finances and sustainable growth".

French finance minister Pierre Moscovici appeared to echo Osborne's remarks.

"The consensus is gaining momentum in the way we balance support for growth and fiscal consolidation," he told reporters.

"There is still a real will to reduce the deficits but certainly there is a change of tone" among G7 members, Moscovici added.

The G7 is meanwhile committed to "nurturing" world economic recovery, said Osborne.

"Overall, our discussions over the past two days have reaffirmed that there are still many challenges to securing sustainable global recovery, and we can't take it for granted," he said.

"But we are committed as the advanced economies in playing our part in nurturing that recovery and ensuring a lasting recovery so that we have prosperity in all our countries."

The talks, also attended by top representatives from the European Union and International Monetary Fund, built on last month's wider Group of 20 meeting while looking ahead to next month's G8 summit in Northern Ireland.

The G7 comprises Britain, Canada, France, Germany, Italy, Japan and the United States. The G8 is the G7 plus Russia.