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World Economic Forum wraps up in Davos

During last day of meetings, world financial leaders warn that more needs to be done to stabilise global economy.
Last Modified: 26 Jan 2013 19:44

Top international financial officials have wrapped up the World Economic Forum in the Swiss resort of Davos warning that much needs to be done to stabilise the world economy.

Christine Lagarde, International Monetary Fund's managing director on Saturday told world leaders to "not relax", despite relief that the euro has remained intact and the US has so far managed to get through a crucial budget hurdle.

Lagarde said that the 17 European Union countries that use the euro have to follow through on steps to keep the troubles at banks from burdening governments.

She said US officials have to "indicate very promptly" how they're going to deal with their ongoing budget dispute between President Barack Obama and Republicans in Congress.

Among the is global issues raised at the conference was "concern" about Tokyo's economic policies.

'Not without concern' 

During the conference, concern had been raised about Tokyo's new economic policies. The new government in Tokyo, led by Prime Minister Shinzo Abe, has pushed the Bank of Japan (BOJ) to be more aggressive in its actions to battle nearly two decades of deflation and sluggish growth.

The BOJ on Tuesday unveiled a new inflation target of two percent and a massive programme of asset purchases to pump money into the economy, sparking accusations that central bank independence had been compromised.

German Chancellor Angela Merkel told the meeting on Thursday that she was "not without concern" about Japan's actions.

But on Saturday Japan's economy minister hit back, saying they did not call into question the independence of its central bank.

Speaking at the World Economic Forum in Davos, Akira Amari said the Bank of Japan had "voluntarily" decided with the government to introduce a new inflation target in a bid to boost the world's third-largest economy.

"As regards the new proposal, you might say that it might undermine the independence of the BOJ. In the case of Japan so far, there has not been any undertaking to share the inflationary targets with the central bank," Amari said.

The policy has also led to a steady decline in the value of the yen against other currencies, boosting exports, but other countries have expressed concern that Tokyo is pursuing a beggar-thy-neighbour approach.

Topless protest

The conference is also routinely marked by protest. Earlier in the Saturday, a trio of topless feminist activists set off pink flares and staged a noisy protest in the bitter cold outside the Davos forum.

The women, from the Ukrainian group Femen tried to break through a security fence before police guarding the World Economic Forum bundled them away.

The groups which has been staging protests at the Swiss meeting since 2010 say that the interests of women are not presented at the conference. 

"Today Femen activists came to scream SOS in Davos, SOS from all women from all over the world ... all the time when they discuss women in economics it's a discussion about one thing, how to earn money more using women, because women are always treated as slaves," Inna Shevchenko, a protester said. 

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