The Group of 20 finance chiefs of the world's leading economies on Sunday called for US deficit cuts and more foreign exchange flexibility in Asia, but were silent on the delicate issue of the weak dollar. Wrapping up a weekend meeting here, the G20 finance ministers and central bank governors said in a closing statement that they expected the macro-economic environment to remain favourable next year. But they said risks to growth had increased due to volatile oil prices, the US budget and current account deficits, and "geopolitical concerns" - possibly referring to issues such as terrorism and instability in Iraq.
"We underscored the importance of medium-term fiscal consolidation in the United States, continued structural reforms to boost growth in Europe and Japan, and, in emerging Asia, steps towards greater exchange rate flexibility, supported by continued financial sector reform, as appropriate," the statement said.
It said the G20 expects oil prices to "moderate in the medium term".
Central bank intervention in the foreign exchange markets was not discussed, German Finance Minister Hans Eichel, whose country holds the presidency of the G20 and hosted the meeting, said at a closing news conference.
US Treasury Secretary John Snow said he was pleased to see a "broad endorsement" by the G20 wealthy and emerging economies of a policy aimed at stimulating global economic growth.
The pact "describes our shared understanding of the economic policies needed for economic growth," Snow said in a statement.
"This accord reflects broad agreement that the world economy is best served by open, competitive markets, free capital flows and free trade."
Snow added that he saw positive global economic prospects, arguing that "with interest rates and inflation still low, conditions are ripe for strong growth to continue."
Snow added that he was "gratified to see broad endorsement of a stronger focus on the policies that lead to economic growth."
In their final communiqué, the G20 finance chiefs also called for more international co-operation to combat the financing of terrorism and step up the fight against money laundering.
"International co-operation to combat the financing of terrorism and the fight against money laundering must continue and should be enhanced in order to protect and stabilise financial systems world-wide," it said.
Ministers said that recent terror attacks in Indonesia, Russia, Spain and other parts of the world have "confirmed that the fight against terrorism remains a global challenges".
"Identifying and cutting off the various mechanisms of financing terrorism is an important contribution to interfere with the preparation of terrorist activities at an early stage," they said.
The statement said G20 member countries agree that counter-strategies against the financial abuse should be developed on a long-run, systematic basis, and that they are committed to working closely on these issues with the Financial Action Task Force on Money Laundering (FATF). It said G20 members should address illegal activities through "intensified monitoring and investigation" by authorities and should "apply appropriate sanctions" if necessary.
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