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G7 finance ministers convene in Washington

finance ministers from the world's seven most industrialized countries are meeting in Washington Friday. They are to be received at the White House as George Bush stresses the importance of coordination in dealing with the crisis.

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Promising "we'll get through this," US President George W. Bush on Thursday scheduled weekend global economic crisis talks at the White House with finance ministers from major wealthy democracies.

He was also due to make a high-profile public statement on Friday to soothe upheaval on financial markets and reassure a fearful public after US stocks plummeted to new five-year lows Thursday in their seventh-straight loss.

The US president, due at political fundraisers in Florida and South Carolina, was first to make remarks in the White House Rose Garden around 10 am (1400 GMT) in a bid to shore up confidence in his administration's handling of the crisis, said spokeswoman Dana Perino.

Bush will "assure the American people that they should be confident that economic officials are aggressively taking every action to stabilize our financial system," Perino said in a conference call.

Bush, who will not unveil any new policy proposal for tackling the crisis, will say that US authorities "have all the necessary tools to address the problems we are facing," the spokeswoman said.

Earlier, Perino announced that Bush would host finance ministers from the Group of Seven (G7) major industrialized democracies, as well as the heads of the International Monetary Fund and the World Bank on Saturday.

"Today the economy, obviously, is going through a very tough stretch," he said at an event to honor Hispanic Americans. "I'm confident in our economy's long-term prospects. We'll get through this deal."

Bush's weekend guests represent Britain, Canada, France, Germany, Italy and Japan. Energy export powerhouse Russia, which joins the G7 to discuss major international political issues as the G8, will not take part, officials said.

At a meeting with Slovak President Ivan Gasparovic, Bush vowed to take "strong action" against the crisis and emphasized "our common desire to work with our European friends to develop a best as possible common policy."

The talks will come after the G7 finance ministers and central bank chiefs meet in the US capital on Friday, and US officials said those talks, not the White House gathering, were most likely to yield any breakthrough deal.

But Bush "will emphasize the importance of nations working in a coordinated way to address the crisis, while respecting the different conditions in each economy," Perino told reporters.

After struggling with little success to stem a financial panic, US Treasury Secretary Henry Paulson was eyeing the possibility of direct capital injections to troubled banks as a means of shoring up a fragile system.

"These capital injections are something that Secretary Paulson is actively considering. But I'd have to refer you to him as to when he thinks he'd be able to make the first move," said Perino.

Such a step, already announced by British authorities, would give the government special shares of the banks in exchange for helping boost badly needed capital in an effort to unclog credit markets, analysts said.

Treasury Secretary Henry Paulson said Wednesday this is an option authorized by emergency legislation giving the administration 700 billion dollars to buy up distressed assets from a real estate meltdown.

"We will use all of the tools we've been given to maximum effectiveness, including strengthening the capitalization of financial institutions of every size," Paulson said.

Bush has repeatedly reached out to world leaders over the past few weeks in an effort to craft a coordinated strategy for confronting what some are calling the worst financial crisis since the Great Depression of the 1930s.

And the White House has said he is "open" to calling an emergency world leaders summit but is focused for now on the immediate task of calming the upheaval on world markets and easing a global credit crunch.

 

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