Marseille lays bare G7 differences and lack of policy room

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Vague pledges and a lack of action by G7 countries underscored differences between Europe and the United States and a lack of room to maneuver in the face of the worst loss of confidence since the credit crisis.

After weeks of market turbulence, finance ministers and central bankers from the Group of Seven industrialized nations pledged a coordinated response on Friday to the global slowdown, but offered no specific steps and differed in emphasis on Europe's debt crisis.

While the United States called on Europe's biggest economies to provide "unequivocal" support to struggling peripheral states to overcome a debt crisis that is crippling the world recovery, euro zone paymaster Germany said the priority was cutting deficits.

"There is no sense of direction, which is entirely expected given that there is no agreement on the path for fiscal policy between the U.S. and Europe, and there is no agreement on the path of monetary policy either," said Gilles Moec, senior economist with Deutsche Bank in London.

"In a way, it's a communique which is a list of constraints which policymakers are facing," he said of a final statement host country France pushed other reluctant G7 members to produce at the end of talks that overran by nearly two hours.

http://www.reuters.com/article/2011/09/10/us-g-idUSTRE7880S620110910