Finance ministers from the world's richest nations headed for talks on the world economy in London on Friday and a farewell party for Alan Greenspan, who is about to bow out after nearly 20 years as US central bank chief.
Greenspan, 79, was due to deliver a speech on imbalances in the global economy. Finance ministers and central bank chiefs have put imbalances and faltering free trade negotiations high on their agenda for this weekend's G7 talks.
The meeting will also be looking at the global economic climate, a day after the European Central Bank raised interest rates in the 12-nation euro zone.
London and Washington hope that the meeting on Friday and Saturday will produce a renewed commitment to free trade ahead of a Hong Kong meeting of 148 countries in less than two weeks' time which is already being billed as a possible failure.
Britain, which holds the presidency of the group gathering in London as well as the European Union presidency, said on Friday it might call a meeting of world leaders ahead of Hong Kong, as Brazil had suggested.
"If the trade talks fail that would be disastrous for the world economy," British Prime Minister Tony Blair told British Sky television.
His finance minister Gordon Brown, who chairs the G7 talks, kept the pressure up for a free trade deal that is mainly jammed by disputes over farm aid and tariffs in rich countries which the OECD says total about $280 billion a year.
"I believe there is a chance for progress if countries worried about services and market access can make some concessions and America and Europe can look again at agricultural protectionism," Brown said.
France in particular is unhappy about trade concessions that are being made on the European Union's behalf in the run-up to the Hong Kong meeting.
Otherwise, the G7 talks that begin with dinner on Friday are expected to focus on the risks of the economy coming unstuck because of imbalances such as excess liquidity, the United States living on credit, European inertia and Asia keeping its currencies artificially low to boost exports, notably China.
The talks involved finance ministers and central bank chiefs from the United States, Japan, Germany, France, Italy, Canada and host country Britain as well as invited counterparts from China, India, Brazil and South Africa.
Beijing, which earlier this year ended its rigid currency peg to the dollar and allowed a small appreciation, made it clear ahead of the talks that yuan reform was not the problem or the solution to trade imbalances in the global economy. On exchange rates generally, the G7 club is unlikely to make any significant change to its traditional statement, officials said in off-record briefings ahead of the London talks.
The dollar has been rising this year as investors plump for the higher rate of return the US currency offers because of serial interest rate rises by the Federal Reserve.
The dollar was largely unaffected by the ECB's decision on Thursday to raise its key euro zone interest rate for the first time in five years to head off inflation risks, a move the ECB says does not presage a Fed-style cycle of further hikes.
France's Christian Noyer, a member of the ECB's rate-setting governing council, said as much on Friday. "Today we absolutely do not expect this to be the beginning of a cycle," he told Europe 1 radio in France. "We believe that what we have done is sufficient for today."
The ECB hiked - to 2.25 percent from a historic low of 2.0 - despite appeals from ministers, business and trade unions to hold off until a long-awaited recovery in euro zone economic growth was more sure-footed.
Three of the G7 ministers are from the euro zone - Germany, France and Italy. French Finance Minister Thierry Breton and his newly appointed German counterpart Peer Steinbrueck were due to meet in Paris, before the London talks.
Steinbrueck said he expected to discuss the interest rate rise in London with ECB chief Jean-Claude Trichet.
US Treasury Secretary John Snow said on arrival in London he hoped the G7 meeting could make progress on trade.
Many developing nations object to the billions of dollars and euros that Washington and the 25-nation European Union give to their farmers, to the disadvantage of farmers elsewhere.