G7 nations must decide own subprime response: British FM

JAPAN: British Finance Minister Alistair Darling on Friday rejected the idea of coordinated action by the Group of Seven rich nations to boost demand in the wake of the US subprime loan crisis.

“The conditions in different countries are not the same,” he told reporters ahead of a meeting here Saturday of finance chiefs from Britain, Canada, France, Germany, Italy, Japan and the United States.

“The actions taken in different countries will be different depending on their particular circumstances,” he said.

Washington has called for other major economies to take measures to boost domestic demand in response to signs of slowing global economic growth, while the International Monetary Fund has urged nations to consider tax cuts.

But the calls seem likely to get a cool response from other G7 nations, with Japan and European nations seemingly reluctant to risk a deterioration in their public finances.

Darling said that a string of interest rate cuts by the Federal Reserve and a US fiscal stimulus plan “were appropriate to the United States because of its particular position.”

“Other countries are not in the same position and they will take the appropriate action.

The actions that will be taken in different parts of the world will depend on their economic conditions,” he said.

Britain has felt the fallout from the credit crunch more than most economies.

British lender Northern Rock was plunged into a severe funding crisis last August when the global credit squeeze forced the embattled lender to request emergency help from the Bank of England.

The British government is currently considering two separate bid proposals for Northern Rock one from a consortium led by Richard Branson’s Virgin and the other from Northern Rock’s own management.

“There are two sets of proposals and we are considering them both and we are considering them both equally,” Darling said.

But he added that a bid “has to stack up for us because if it doesn’t then the option of a temporary period of nationalisation remains on the table.” Tokyo, Friday, AFP