The G7 Summit Will Convene A &Nbsp On Friday, Or Set A Tone Of Easing Policy To Tide Over Difficulties.

Along with the world Economics Growing risks are growing. The finance ministers and central bank governors of the group of seven, the G7, comprising the United States, Canada, Japan, Germany, France, Italy and the United Kingdom, will meet in France this Friday to discuss how to take action to revitalize the slowing global economy.

Reuters quoted on Tuesday the Seven Powers G7's source said that G7 leaders are worried about the global economic outlook and are expected to agree to keep loose monetary policy at the meeting and to slow down fiscal consolidation in those countries that may be restructuring.

If so, this means Post Crisis The "normalization" process of monetary and fiscal policies will come to an end in the era, and the easing of the "two bottom" policy will come back.

G7 or joint tone easing policy

"The main topic will be the slowdown in the global economy and what is the best solution," said G7 official, who is familiar with the preparations for the meeting.

Recently released economic data showed abnormal weakness. The US non farm employment growth in August, which was released on Friday, is far below the 80 thousand increase expected by the market. The second quarter GDP was revised downward to 1% year-on-year. In Europe, Germany's GDP grew by only 0.1% in the second quarter, while France was flat. Global economy faces "two times" Bottom "The risk is increasing.

G7 countries have reached a consensus that the global economy has entered the most difficult period since the collapse of Lehman Brothers, and that the economy has two chances of recession.

The official said that this is because the uncertainty caused by the dispute between the sovereign debt crisis and the US debt ceiling has seriously affected market confidence and led to the aggravation of temporary factors such as high oil prices.

In August, New York's stock market hit its worst performance in 10 years. By the end of August 31st, the Dow Jones industrial average had more than 1000 waves in August and a 4.4% decline in the whole month. In September 5th, Europe's stock market slumped again due to the European debt crisis and economic slowdown. The German stock market fell more than 5%.

In response to what measures G7 will take, he pointed out that the G7 meeting will show that countries will "imply continued monetary policy easing, fiscal consolidation will continue, but some countries will slow down as the situation slows down". The official said that the discussion on monetary easing policy would include quantitative easing and other issues.

The officials also said that countries that are temporarily not facing market pressure need to slow down in the short term to consolidate their finances and strive to achieve their goals in 2013~2015, which will depend on the economic development of 2012.

At present, G7 has no plans to announce the official communiques after the meeting. However, a briefing on the main contents of the conference may be announced by France, which presided over the meeting.

European debt crisis needs urgent solution

According to sources, the G7 conference will also discuss the euro zone debt crisis, which is one of the important reasons for the decline in investor confidence.

With the European debt crisis dragged on, the next "Domino" is looming: Italy's ten year Treasury yields seem to be catching up with Spain. This shows that the market has begun to pay special attention to Italy, which is regarded as the next target of debt crisis early warning.

Italy is likely to undertake structural reforms under pressure to increase its economic growth rate, thereby easing the market's concern about its ability to pay public debt, which accounts for 120% of GDP.

But those sources say euro zone countries are unlikely to make efforts beyond the scope of the agreement. For example, G7 can not press the euro zone to further expand the scale of the European financial stability fund (EFSF), because Germany and France are more likely to undermine EFSF's AAA credit rating if they make more capital injection commitments.

"It's not time to blame each other, but how to solve problems together, and the problem has become quite complicated." The official said.

The further capital restructuring of the European banking system called for by IMF may also be within the scope of G7 discussions. However, according to sources, the EU may insist on its position. The bank stress test in July last year is enough to explain the fund needs of the sector. These problems are being solved.

Call on emerging markets to accept growth "baton"?

In addition, G7 will also propose that it is necessary to achieve "rotational growth". When the economic growth of the developed countries is slowing down, the emerging economies such as China and other Asian countries should take the "baton" of growth. Against this background, G7 will probably call on countries with large current account surpluses to raise domestic demand and allow their currencies to appreciate.

However, in a globalized world economy, the relationship between economic growth in developed and emerging markets can almost be described as "lip to mouth".

Singapore's finance minister, Dammam, warned in September 6th that Asia would not be immune from slowing global economic growth. He said that because of the "stagnation" of growth in the US and European economies, the possibility of a global recession is rising. At present, the world has entered a downward spiral of consumer confidence, which has delayed investment.

At the same time, Japan will probably raise the issue of the appreciation of the yen. Japan's new finance minister, Ansheng Chun, said in September 6th that he would express his deep concern about the appreciation of the yen at the forthcoming G7 meeting, and tried to convince G7 other ministers of finance to believe that the yen was strong enough to bring risks.