Financial recovery:

G8 urges caution

AITALY: G8 finance chiefs on Saturday warned the global economic outlook remained uncertain and risky despite "signs of stabilisation" after talks in southern Italy. "There are signs of stabilisation in our economies...

but the situation remains uncertain and significant risks remain to economic and financial stability," ministers from the G8 leading world powers said in a statement.

"We must remain vigilant to ensure that consumer and investor confidence is fully restored and that growth is underpinned by stable financial markets and strong fundamentals," they added at the close of two days of talks. There were divisions however as Germany pressed governments to prepare to scale back huge deficits and spending incurred during the global economic crisis while the United States urged countries to stay the course. Rifts also emerged over US-style "stress tests" to check on the financial stability of crisis-hit European banks, with Washington and London in favour but Berlin warning that they could undermine economic confidence.

The Ministers said they would continue to provide liquidity for banks as required and begin to prepare "exit strategies".

Lecce, Sunday, AFP