G-7 in Istanbul
October 4, 2009
Ahead of the G-7 talks, European finance ministers put pressure on the United States to defend the dollar, which has weakened considerably as a result of signs of a tentative global economic recovery.
"Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability," the statement read.
Signs of recovery have pushed down the value of the dollar, which is traditionally seen on currency markets as a safe haven in tough economic times.
Weak dollar harms European exports
The current state of the dollar has led some experts to conclude that Washington is allowing the currency to lose value as a way of boosting US exports by making them cheaper - a tactic that would weaken European exports.
"We continue to believe that we need a strong dollar," said French Finance Minister Christine Lagarde following the talks.
US Treasury Secretary Timothy Geithner repeated the US strong-dollar mantra while saying restoring sustainable growth was the top priority.
"It's very important to the United States that we continue to have a strong dollar," Geithner said in a news conference after the G-7 meeting. "We recognize the dollar's important role in the system conveys special burdens and responsibilities on the US," he said.
"We're going to do everything necessary to make sure we sustain confidence," Geithner said.
Economic crisis is not over
The statement also warned that while there were signs of an economic recovery, the worst was not yet over.
"There is no room for complacency since the prospects for growth remain fragile and labor market conditions are not yet improving. We will keep in place our support measures until recovery is assured," the statement read.
Meanwhile there have been calls for China to allow more flexibility in its yuan exchange rate, which is strictly controlled by the nation's foreign exchange authorities.
av/Reuters/AFP/dpa
Editor: Clare Atkinson