Arctic meeting a turning point for G-7

IQALUIT, Nunavut — A meeting of finance officials from the Group of Seven leading industrialized countries in this tiny Arctic outpost certainly lived up to host Canada's billing as a gathering with a difference.

Ditching suits and ties, finance ministers and banking officials grinned in delight as they went dogsledding on frozen Frobisher Bay, crawled into igloos, had cozy chats by a roaring fire and caught glimpses of the Northern Lights.

Host Canadian Finance Minister Jim Flaherty sold the unusual location — the town of Iqaluit, population 7,000 — as a chance to take the G-7 back to its roots of informal straight talk among countries with similar economies and problems, rather than carefully crafted communiques and discussions with outsiders Russia or China.

The hoopla provided by the unique location may have been something of a smokescreen for the group's waning power as officials acknowledged privately that it is accepting its diminished role in a world where developing countries have grown in influence.

Yet they also indicated they found its less formal tone — more frank discussion, less time haggling over the communique — useful in its own way.

Dropping the usual formal statment that traditionally took time out of talks to draft, finance ministers opted instead for a quick joint press conference on Saturday as they sought to calm jittery global markets with renewed pledges to keep providing large amounts of government support to sustain the economic rebound.

They also played down differences on banking reform following U.S. President Barack Obama's unilateral proposal to rein in risky bank practices, saying that while approaches would differ to reflect domestic situations they agreed to work toward new global standards.

The G-7 acknowledged its fall in the pecking order last year when it ceded responsibility as the preeminent forum for dealing with the world's economic and financial problems to the G-20. The recent economic crisis has underscored a belief for many that the exclusive G-7, comprising the United States, Canada, Britain, France, Germany, Italy and Japan, is an outdated grouping.

While those countries used to run the world, they're now the ones facing soaring government debt, high unemployment and — for Britain and the U.S. — the fallout from multibillion dollar banking system bailouts.

Even as they met in Canada's remote Nunavut territory, other developed western European countries sparked renewed turmoil in financial markets via fears about rising debt levels in Greece and Portugal.