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G-7 appeals to oil suppliers to help control prices

Finance ministers and central bankers from Britain, Canada, France, Germany, Italy, Japan and the United States also gave an upbeat assessment for global economic prospects next year, describing them as “favourable.” But they warned in a statement following a meeting here that growth was uneven and at risk from high oil prices.

“We call on oil producers to provide adequate supplies to ensure that prices moderate,” they said, adding that consumers had to boost energy efficiency.

“We’re urging the countries with reserves to do everything they can to make sure that the supplies are adequate to meet market requirements,” US Treasury Secretary John Snow told reporters following the meeting.

“That commitment on their side to make adequate reserves available will help deal with some market uncertainty, which I think is feeding some speculation and which is taking the spot price well above the fundamentals in the markets.”

Snow added that high energy prices “reduce the level of disposable income that people have to use for other claims,” noting that US consumer sentiment had weakened in the second quarter.

“I don’t think we’re going to have a recession but what I’m worrying about is a slowing of this good growth in the world economy.” A more ominous assessment came from European Central Bank president Jean-Claude Trichet, who said, “all we are observing today is not encouraging.” He said that if oil prices continued to climb it would pose “a serious problem” for the world economy. The G-7 also took note of increased agitation for action by rich countries to ease the debt burden carried by the world’s most impoverished nations, many of which spend more on debt servicing than on social welfare.

“We are now committed to addressing the sustainability of debt of the poorest countries by making progress on debt relief and grant financing,” the statement said.

Ministers stopped short of endorsing a proposal by Britain to write off its share of debt and avoided any mention of proposals advocated by development activists for a 100-per cent cancellation of obligations carried by poor nations. Two groups pressing for a full write-off of debt for the poorest countries criticized the G-7 for a lack of action. “The G-7 have chosen to delay debt cancellation that could have put 100 million children into school,” said Oxfam’s Max Lawson. “Once again rich countries have turned up with their notebooks, not their checkbooks, and the price will be paid by the world’s poorest people.”