As the global economic crisis continues to cause problems, G7, which consists of the leading industrial countries in the world have vowed to avoid protectionism.

The G7 currently consists of: Germany; Italy; France; the UK; the USA; Canada; and Japan.

What Was Decided?

Finance ministers representing their countries at the G7 summit held in Italy, have all voiced their belief that raising the barriers on free trade would only make the economic situation worse than it currently is.

Just hours before this decision was reached, the US Congress approved a $787 billion economic recovery plan. This plan includes a “Buy America” clause, which has caused fears that protectionism could grow in the world’s largest economy.

Ministers from the summit said that stabilising the world economy and the financial markets was their top priority, and that they would work together to support growth and jobs.

What Was Said?

After the meeting had taken place, US Treasury Secretary Timothy Geithner gave a statement dismissing such concerns. He said: “All countries need to sustain a commitment to open trade and investment policies which are essential to economic growth and prosperity.”

Ministers from the G7 meeting also called for reform to be made to the International Monetary Fund, as they believe that the crisis has shown weakness in the current world finance system. In a statement, the Ministers said: “We agree that a reformed IMF, endowed with additional resources, is crucial to respond effectively and flexibly to the current crisis.”

The statement also covers many other points that were discussed at the summit, including:

• Praise for China’s recent economic moves
• Help needs to be given to banks
• The need for a quick finish to the Doha talks on world trade.

A correspondent at the meeting, says that what the meeting was billed as and what it turned into were two distinctly different things.

He said that the meeting was meant to be to discuss the broad issues of the economic crisis, however it turned into a meeting to decide on major policy initiatives.

What’s The Next Step?

Alistair Darling, the UK’s Chancellor of Exchequer (Finance Minister), said it was a stepping stone for the G20 meeting in London that is scheduled for April. This meeting also includes big emerging economies like China and India.

What Do You Think?

Should more have been decided at the G7 meeting? Are the G7 countries doing all they can to help the economic downturn? What do you think they should do? Comment here.