The leading industrial countries that make up the G7 say they will do everything possible to avoid protectionism.
Finance ministers meeting in Italy say blocking free trade would make matters worse, not better, as happened in the 1930s depression. Their statement appeared to be designed to ease fears governments would abandon cross-border trade agreements. Hours earlier the US Congress approved an economic stimulus package that includes a “Buy American” clause. US Treasury Secretary Timothy Geithner said: “All countries need to commit to sustain open trade and investment policies, this is absolutely critical in confidence. The countries around the world today recognise this common imperative.” Government rescue plans for French and Italian carmakers have also raised eyebrows. The G7 statement said stabilising the economy and financial markets was paramount. German Finance Minister Peer Steinbrueck explained: “As I have said myself, if we want to have an economic recovery, the main requirement will be getting back trust in the financial markets, and the prerequisite of returning trust to the financial markets will be that banks clear up, really clear up, their balance sheets.” Outside the meeting in Rome, security remained tight after large scale demonstrations against the financial crisis. With so many people in so many countries affected to a greater or lesser degree by the credit crunch, hopes of the G7 meeting were high, even if expectations were not.