CHANCELLOR George Osborne will use today’s G7 meeting in Buckinghamshire to urge central bank chiefs and finance ministers to embrace “monetary activism” in a bid to stimulate the global economy.
Ongoing economic strife in the Eurozone is expected to top the agenda, a day after new figures revealed that unemployment in Greece rose to an all time high of 27 per cent in February, with youth unemployment climbing to 64.2 per cent.
Further protests took place in Spain yesterday, where unemployment is up to 26.7 per cent.
“The European Central Bank (ECB) has recently cut rates and raised the prospect of unconventional measures should conditions deteriorate further,” Osborne said this morning.
“The G7 is an opportunity to consider what more monetary activism can do to support the recovery, while ensuring medium-term inflation expectations remain anchored.”
Schemes to boost credit in the so-called real economy, such as the UK’s funding for lending scheme (FLS), must be considered across the G7 nations, Osborne added, while also endorsing free trade, fiscal responsibility, and structural reform.
The chancellor wants the meeting at stately home Hartwell House, which spans today and tomorrow, to involve more informal discussions rather than set-piece speeches.
Bank reforms are also expected to be high on the finance chiefs’ agenda, prompted by the crisis in Cyprus.
“I think Cyprus just further highlighted the importance of moving to break that feedback loop between sovereigns and bank balance sheets,” a US Treasury official said yesterday.
As well as the US and UK, the G7 consists of Germany, Japan, Italy, France and Canada – representing nearly half of the world’s economic output.