G-7 ministers to hold phone talks early Monday

By Mari Yamaguchi

Associated Press

Published: Sunday, Aug. 7 2011 3:20 a.m. MDT

A monitor displays the Dow Jones Industrial Average on the floor of the New York Stock Exchange on Friday, Aug. 5, 2011 in New York. A government report that hiring improved in July sent stocks sharply higher just after the market opened. The rally lasted less than a half-hour. Many economists still fear that the economy might dip back into recession.

Jin Lee, Associated Press

TOKYO — Financial ministers from the Group of Seven leading economies are to hold a teleconference Monday to discuss world market stability as Middle Eastern markets tumbled Sunday on the first business day after a historic U.S. credit rating downgrade.

Japanese media say deputy finance ministers agreed Sunday on a conference call among the higher-level ministers. Kyodo News agency reported it would likely be held before Asian markets open Monday morning, but the timing wasn't more specific.

The countries are concerned the historic downgrade of the U.S. credit rating Friday would deal a significant blow to consumer and business confidence and financial markets.

The leaders from Britain, Canada, France, Germany, Italy, the U.S. and Japan are also expected to discuss the eurozone sovereign debt concerns.

Standard & Poor rating agency announced late Friday it would strip the U.S. of its sterling AAA credit rating for the first time and move it down one notch, to AA+.

Economists say the real danger won't be higher interest rates but sinking confidence in the American economy and its leaders.

Middle East markets, open Sunday through Thursday, were the first to react to the late Friday news. Dubai's main market index was down more than 4 percent at midday, and other Gulf markets also opened sharply lower.

China, the largest foreign holder of U.S. debt, on Saturday demanded that the United States tighten its belt and overcome its "addiction to debt."

Japan's Nikkei index lost ground in the past week due to debt crisis developments.

Get The Deseret News Everywhere

Subscribe

Mobile

RSS