No to Protectionism

The gathering in Rome began on Friday evening and was scheduled to end on Saturday afternoon with a joint statement and closing news conferences.

The ministers were also set to stress free trade as a tool for global economic prosperity, according to a draft copy of the statement obtained by DPA news service.

"The G7 remains committed to avoiding protectionist measures, which would only exacerbate the downturn, to refraining from raising new barriers ..." the draft statement said.

Ahead of the talks, which mark the first international appearance of new US Treasury Secretary, Timothy Geithner, European leaders had voiced concern over protectionism.

US President Barack Obama's administration's proposed economic stimulus package includes a controversial "Buy American" clause.

Getting the US back on track

Geithner is expected to brief his G7 counterparts from Japan, Germany, France, Britain, Italy and Canada, on Washington's plans to get the US economy back on track.

"We share the view that we must avoid protectionism," German Finance Minister, Peer Steinbrueck, said after talks with Geithner on Friday evening.

Ahead of the meeting France and Italy indicated they will push for tighter financial controls including through direct and indirect market regulations also aimed at strengthening the crisis-ridden banking sector.

Italian Economy Minister Giulio Tremonti, whose country holds the current G7/G8 presidency, has mentioned the need to devise an internationally adhered-to "legal standard" to be applied to financial markets as well as tougher supervision of banks.

Tighter controls

French Economy Minister Christine Lagarde has indicated she will press for tighter controls compelling banks to build a stronger capital base when lending money to potentially risky clients such as hedge funds.

The draft statement mentions the need to "accelerate reforms of the regulatory framework" of financial markets.

G7 finance ministers have asked their deputies, in consultation with partners from emerging economies to prepare by July a progress report on an "agreed set of common principles and standards of propriety, integrity and transparency of international economic and financial activity," the draft statement said.