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Economy tops G8 agenda

By CNN European Political Editor Robin Oakley

LONDON, England (CNN) -- The task of the world leaders congregating in Genoa for this year's G8 summit seems straightforward enough. They have to talk some confidence back into a world economy gripped by fears that a slowdown could turn into widespread recession.

The tone has been set by the G8 finance ministers, who met in Rome on July 8. They issued a cautiously optimistic statement suggesting there was a "solid foundation for renewed expansion."

The finance ministers agreed that the slowdown had been more severe than expected, with European economics commissioner Pedro Solbes saying he had revised his forecast of growth in the eurozone from 2.8 to 2.5 percent.

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As the ministers sought to stiffen business backbones, many were looking to the United States to lead the recovery towards better growth figures.

U.S. Treasury Secretary Paul O'Neill did not disappoint them, suggesting that zero growth in the second quarter for the U.S. should be followed by 2 percent by the fourth quarter and 3 percent next year.

But O'Neill wants Europe to be the "locomotive" pulling others into growth. He and some other summit nations would like to see the European Central Bank readier to cut interest rates.

The most cautious note at the Rome meeting came from UK Chancellor Gordon Brown, who warned "the downturn in the world economy has not reached its bottom" and that no country and no continent could be isolated from global trends.

G8 summits have a tendency to be taken over by the politics of the moment rather than the economics of the year ahead. They may yet be diverted by troubles in the Balkans or the Middle East.

But the leaders will congregate in Genoa seeking to do more to alleviate the debt of the world's poorest countries, many of them in Africa, and to contribute to the U.N. drive against infectious diseases such as AIDS, TB and malaria.

They will as usual try to push Russia into further economic reforms and Japan into working its way out of economic stagnation. There will be efforts too to reform multilateral development banks like the World Bank. Two of the G8 leaders will be attending their first G8 summit: Much attention will focus again on U.S. President George W. Bush, making his second foray within a month into a Europe which has "agreed to differ" from him on the Kyoto climate change protocol and, for the most part, on missile defence.

Bush will also have a second meeting in Genoa with Russian President Vladimir Putin, who has made combative noises about missile defence since their first apparently amicable encounter in Slovenia.

But the new star may yet prove to be Junichiro Koizumi, a new mould of Japanese prime minister who, with an election coming up shortly, will be keen to make a splash on the world stage. In his few short weeks in office he has already glad-handed his way through Washington, London and Paris.

For media tycoon-turned-politician Silvio Berlusconi, back as Italy's prime minister after a brief period in the job in 1994, when he hosted the summit in Naples, the nightmare will be providing for the security of his fellow leaders and the summit proceedings, now that every such meeting has become a target for anti-globalisation protesters.

But he'll try to do without totally alienating the unfortunate citizens of Genoa, who are likely to find their local transport systems paralysed for the duration of the summit from July 20-22.

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