G7 finance chiefs ponder flagging growth amid Greek crisis fears

Wed May 27, 2015 3:12pm EDT
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By Paul Carrel and David Ljunggren

DRESDEN, Germany (Reuters) - G7 ministers and central bank heads convened on Wednesday to discuss how to revive global growth and China's increasing clout, while keeping a close eye on the protracted talks to avoid a Greek default.

Although the Greek crisis is not on the official agenda for the three-day meeting in the German city of Dresden, it will be discussed on the sidelines.

The United States is likely to use the talks, running through to Friday, to press Europe to reach a funding-for-reforms deal with Greece.

U.S. Treasury Secretary Jack Lew said he feared a miscalculation could lead to a new crisis which could have consequences for the wider world and said Greece's creditors may have to give some ground.

"The challenge for the Europeans, the political and economic institutions -- the IMF -- is to show enough flexibility," Lew said in London.

The threat of a Greek default, rising oil prices and bond market turmoil are helping fuel investor nervousness.

Canadian Finance Minister Joe Oliver was in more confident mood on Greece. "Decisions have to be made but they are going to be made, I think, with knowledge of the consequences," he told Reuters.


Balloons made by the 'ONE' campaigning organisation depicting leaders of the countries members of the G7 are seen in Dresden, Germany, May 27, 2015. Dresden hosts the G7 finance ministers and central bankers meeting. The balloons show Japanese Prime Minister Shinzo Abe (L), British Prime Minister David Cameron (4th L), French President Francois Hollande (2nd L), German Chancellor Angela Merkel (3rd L), U.S. President Barack Obama, Italian Prime Minister Matteo Renzi (2nd R) and Canadian Prime Minister Stephen Harper (R).  REUTERS/Fabrizio Bensch TPX IMAGES OF THE DAY