G8 ministers focus on helping 'Arab Spring' states

10th September 2011, Comments 0 comments

G8 finance ministers turned their attention Saturday to the Arab Spring amid claims their previous promises to help the region's transition from dictatorship to democracy did not materialise.

The ministers meeting in the French city of Marseille on Friday vowed tough measures to get the global economy back on track but were short on detail and admitted the problems were so complex that a unified response was impossible.

The gathering came as stock market turmoil returned to both the United States and Europe after the shock resignation of the European Central Bank's top economist fuelled fears over the continent's debt crisis.

The ministers from Britain, Canada, France, Germany, Italy, Japan, Russia and the United States invited Libya's new rulers to Marseille in a follow-up to the economic support for post-revolutionary governments announced at a G8 meeting in May.

The fledgling Libyan administration's officials on Saturday joined Egypt, Jordan, Morocco and Tunisia to explain how they plan to relaunch their economies and hear what help they can expect from the world's major economic powers.

A G8 summit in the French city of Deauville in May promised the Arab world $40 billion (29 billion euros) for development and democracy in a range of international offers of aid and loans.

But this week both Egypt and Tunisia -- which ousted strongmen leaders in popular uprisings and are due to hold elections before the end of the year -- said they had so far received little or nothing.

Tunisia's Finance Minister Jalloul Ayed told the Financial Times that his country had recieved not a pennny, while his Egyptian counterpart said only $500 million had come through.

Delays in delivering on the funding could complicate the transition to democracy in both north African states.

Jordan and Morocco, which have not faced popular revolutions but whose kings have promised steps towards more democratic representation, joined the so-called Deauville Partership after the initial members Egypt and Tunisia.

The finance ministers' meeting kicked off Friday as a G7 gathering but they were joined on Saturday by Russia's top finance official.

They differed sharply on what approach to take to slowing growth in the world economy that threatens to turn into another recession.

While the Americans were clearly plumping for stimulus, the Europeans were determined to railroad reform and austerity measures through parliaments.

The meeting came a day after US President Barack Obama unveiled a $447 billion jobs plan aimed at energising the world's largest economy.

Most European nations used stimulus spending to temper the effects of the recession that followed the 2008 financial crisis, but have now focused on cutting their deficits given their high debt loads.

German Finance Minister Wolfgang Schaeuble said that taking a stimulus approach in Europe now would "aggravate the problems instead of resolving them".

French President Nicolas Sarkozy, speaking in Paris, also said Europe was unlikely to follow the US example.

When asked if Europe needed a similar plan, Sarkozy said: "No. A recovery plan, we're not going to be asking Greece to do that."

Greece's European partners have been demanding that the country -- which benefits from a massive bailout to head off a government debt default that would weaken the euro -- slash state spending and raise taxes.

But French Finance Minister Francois Baroin conceded that European governments must also go for growth.

"We must tread the difficult path of achieving fiscal adjustment plans while supporting economic activity," he told reporters.

© 2011 AFP

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