Page last updated at 11:23 GMT, Sunday, 7 February 2010

Darling 'confident' on economic recovery at G7 meeting

Tim Geithner and Alistair Darling
G7 finance ministers agree stimulus spending must continue

Chancellor Alistair Darling has said the UK and other industrial nations are committed to public spending to bolster the shaky return to growth.

He added he was "confident" the global economy was on the path to recovery.

Mr Darling was speaking at the end of a meeting of finance ministers from G7 leading industrial nations in Canada.

Bank regulation and worries over budget deficits in Greece, Spain and Portugal were among issues discussed at the two-day meeting.

In a separate development, the finance ministers pledged to write off the debts that Haiti owes them, following the country's devastating earthquake last month.

'Turbulent period'

Ministers agreed that the global economy was starting to recover, but was still too weak for governments to withdraw stimulus measures.

"The important thing is that we all are absolutely committed to maintaining the support for our economies until we make sure we have recovery established, and then to make sure we can chart a way to ensure that we got sound, long-term growth in the future," Mr Darling said.

"And I hope that this meeting will provide yet another stepping stone along that way. And the last 18 months, we've come through an extremely turbulent period. But I think we can be confident, although we remain cautious, that we are on the right path, provided we see that through."

Although the UK did officially come out of recession in the fourth quarter of 2009 - ending six consecutive quarters of economic decline - the growth was just 0.1%, much less than expected.

Monitoring pledge

The collapse in confidence among investors about Greece's ability to pay its debts, and knock-on concerns about Portugal and Spain, meant the European financial crisis was high on the agenda of the G7 meeting.

The European G7 countries told the US, Japan and Canada that they would ensure that Greece delivered on its pledge to drastically cut its budget deficit by 2012.

"Will we will monitor and make sure the Greek plan is managed," said French Economy Minister Christine Lagarde.

The ministers also discussed various proposals to tax banks to recapture bailout costs, but reached no decision on a uniform way to proceed.

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