Italy to push for broader G7 membership
WASHINGTON (Reuters) - Italy will push for broadening membership in the Group of Seven when it takes over leading the rich nations' club next year, Italian Economy Minister Giulio Tremonti pledged on Saturday.
Tremonti said he also wanted to see new and more varied tasks assigned to the International Monetary Fund and World Bank to try to smooth the operation of the global economy.
Speaking to reporters at the Italian Embassy, Tremonti also said sweeping radical reform of market regulation should include a discussion on the abolition of hedge funds. Italy will assume the rotating presidency of G7 in January. Tremonti had outlined his ideas to the G20 club, which includes both leading and emerging economies, earlier on Saturday.
"We propose to go beyond the G7 framework to adopt a larger structure," he said. He did not suggest which or how many new countries should enter the exclusive rich nations group, saying that for now he was calling it the GX.
Proposals for enlarging G7 membership have been floated since the start of the decade, fanned especially by China's emergence as an economic powerhouse but also by a sense that the original G7 no longer has the leverage needed to cope with crises that are transmitted through a global economy.
Tremonti said Italy would propose the IMF and the World Bank "can be used for different goals," and be given new tasks to complement their current ones.
Tremonti has spoken on several occasions of the need to "redesign the Bretton Woods" agreement, which established the post World War Two global financial structure.
The rewriting of financial market rules should target "absolutely crazy bodies, like hedge funds which have nothing to do with capitalism."
Asked if he was suggesting that hedge funds should be banned, he said "we have to launch a discussion about this."
At this year's Economic Forum in Davos, Switzerland, delegates rated a lack of international policy coordination as the single greatest risk the world economy faced in 2008 and that prediction is coming home with a vengeance.
U.S. Treasury Secretary Henry Paulson said on Friday night that he had asked for a meeting of the broader G20 -- the G7 plus key emerging market economies like China, Brazil, India and South Africa -- because they are vital in the bid to find a solution to current turbulent market conditions.
"The developing world is playing a very big role ... so it is very important to get this group together to talk about the same issues we are talking about at the G7," Paulson said.
China's central bank deputy governor, Yi Gang, told the International Monetary Fund's steering committee that it was willing to do what it could to restore stability.
"China is willing to strengthen its cooperation with other countries and, through joint efforts, we hope global financial stability can be safeguarded," Yi said.
(Additional reporting by Paul Eckert and Glenn Somerville;; Editing by Neil Stempleman)
