G7 telephone conference expected before Asian markets open

Aug 7, 2011, 9:14 GMT

Tokyo - Representatives of the Group of Seven (G7) agreed in a telephone conference Sunday that their finance ministers must hold talks - possibly later Sunday - on the US and European debt crises, the Kyodo news agency reported.

The finance ministers and central bankers of the G7 member states - Britain, Canada, France, Germany, Japan, Italy and the United States - were expected to talk before financial markets open in Asia at 0000 GMT on Monday.

Their telephone conference would likely occur 'as early as Monday Japan time,' Kyodo wrote, citing sources close to the discussions.

Markets were in turmoil last week, responding negatively to persistent concerns that Europe's debt crisis could spread to Spain and Italy, as well as the deal struck in Washington to increase the US debt ceiling.

The G7 ministers may issue a joint statement on the downgrading of US government debt by credit rating agency Standard and Poor's, and on the sovereign debt problems in some of the eurozone countries, Kyodo reported.

However, French President Nicolas Sarkozy and German Chancellor Angela Merkel had agreed on Saturday to wait before making any further announcements, reported French newspaper Journal du Dimanche.

They had decided against issuing a joint statement reiterating Europe's 'unified' stance on the debt crisis, out of fears that this could further upset markets, the newspaper wrote. For the same reason, Sarkozy had decided not to curtail his holiday.

The two leaders reportedly agreed to watch market reactions on Monday and Tuesday, following better-than-expected US jobless figures released Friday.