 |
|
|
|
 |
 |
Crises involving finance, food and fuel - the three Fs - are buffeting Asia and Europe, French Finance Minister Christine Lagarde said Sunday. "Of course, we would all prefer to be triple A economies, but indeed we are facing triple F challenges," Lagarde said in a speech to a conference on regional integration.
Lagarde was referring to the credit crunch that emerged last summer in the United States that rocked financial institutions beyond its shores, sharp rises in prices for foodstuffs and skyrocketing costs for fuel in the form of oil and gasoline.
"Adverse shocks have affected our economies," said Lagarde, who emphasized they can be confronted better as regional blocs than on a national basis.
"The common policy challenges that we have are clearly a need for (a) political and economic answer to the rise in both the fuel and food prices and their social and economic impact," she said.
Lagarde, who was speaking after attending the Group of Eight finance ministers' meeting, said the main concern by all participants at that gathering Friday and Saturday in Japan was "clearly about the price of food, the price of fuel and the social unrest that results from such movements."
She also said the G-8 ministers concluded that integration in Europe and moves for more closeness under way in Asia lessened the negative impact on the two regions from the fallout of a slowing U.S. economy resulting from the credit crisis.
Lagarde's remarks came on the eve of a meeting of finance ministers from the 43-member Asia-Europe Meeting, or ASEM, held on the South Korean resort island of Jeju.
ASEM brings together the 27-member European Union and 16 Asian countries, including economic powerhouses Japan, China, India and South Korea.
Lagarde also said that the financial, food and fuel problems were closely linked.
"To fix one, we need to fix the others," she told reporters after her speech. "So I think it's critical that we, number one, bring some stability back to the financial markets."
Lagarde said doing that would encourage investors to return to putting their money into "typical financial instruments, rather than move toward what I call the liquid and solid instruments, which have to do with fuel and food."
EU Economic and Monetary Affairs Commissioner Joaquin Almunia said the long-simmering problem of global imbalances was at the root of the financial, food and fuel problems.
"This is the real origin of the financial tensions that we are suffering," Almunia said at the conference. "And this can explain also some of the developments in the evolution of the oil markets and the food markets and commodity markets."
Global imbalances usually refer to the twin current account and budget deficits in the United States and trade surpluses in Asia.
Written By KELLY OLSEN
ABC 7 News to leave comments on news stories.