G8 Leaders Believe Economy Still Faces “Significant Risks”

    According to summit draft documents, G8 leaders believe the world economy still faces "significant risks" and may need further help. The documents also reflect failure to agree climate change goals for 2050.

Progress on the environment was impeded by Chinese President Hu Jintao returning home due to unrest in northwestern China in which 156 people have died. Before he left, summit host Silvio Berlusconi spoke of Chinese "resistance" on climate goals.

"There is agreement (among G8 countries) but China is still skeptical. We have to verify tomorrow with India and China the level of agreement that we can reach," Berlusconi said at the start of afternoon talks.

The summit brought together leaders from the United States, Canada, Japan, Russia, Britain, France, Germany and Italy. But in a sign of the shifting balance of power, much of the discussion will be expanded to include emerging powers India, China, Brazil and South Africa.

While the focus is largely on the global economy, leaders will thrash out issues such as climate change, world trade and food security as well as the Iranian and North Korean nuclear programs.

It is the biggest international gathering since a landmark Group of 20 summit in April when one trillion dollars was committed to the International Monetary Fund and other global bodies to help struggling economies.

According to a copy of a joint declaration agreed at a working lunch, the G8 leaders may have detected some positive signs but do not believe the global economy is safe yet. "While there are signs of stabilization, including recovery in stock markets ... the situation remains uncertain and significant risks remain to economic and financial stability," said the statement.

The communiqué was vague however about what further steps were needed. "We commit to continue to provide macro-economic stimulus consistent with price stability and medium-term fiscal sustainability," said the text. "Exit strategies will vary depending on economic conditions and public finances," it added.

Ahead of the meeting, a senior White House official said it was important the G8 did not opt for a quick-fix. "The G8 shares a perspective that it's important that we come out of this with a balanced and sustained growth, that we take the necessary actions to do so, and that we return to fiscal sustainability over the mid-term," said Mike Froman, deputy national security advisor for international economic affairs.