French finance minister says finance, food and fuel challenges buffeting economies

The Associated Press , Soegwipo, South Korea | Sun, 06/15/2008 3:32 PM | Business

Crises involving finance, food and fuel -- the three Fs -- are buffeting Asia and Europe, French Finance Minister Christine Lagarde said Sunday.

"Of course, we would all prefer to be triple A economies, but indeed we are facing triple F challenges," Lagarde said in a speech to a conference on regional integration.

Lagarde was referring to the credit crunch that emerged last summer in the United States that rocked financial institutions beyond its shores, sharp rises in prices for foodstuffs and skyrocketing costs for fuel in the form of oil and gasoline.

"Adverse shocks have affected our economies," said Lagarde, who emphasized they can be confronted better as regional blocs than on a national basis.

"The common policy challenges that we have are clearly a need for (a) political and economic answer to the rise in both the fuel and food prices and their social and economic impact," she said.

Lagarde, who was speaking after attending the Group of Eight finance ministers' meeting, said the main concern by all participants at that gathering Friday and Saturday in Japan was "clearly about the price of food, the price of fuel and the social unrest that results from such movements."

She also said the G-8 ministers concluded that integration in Europe and moves for more closeness under way in Asia lessened the negative impact on the two regions from the fallout of a slowing U.S. economy resulting from the credit crisis.

Lagarde's remarks came on the eve of a meeting of finance ministers from the 43-member Asia-Europe Meeting, or ASEM, held on the South Korean resort island of Jeju.

ASEM brings together the 27-member European Union and 16 Asian countries, including economic powerhouses Japan, China, India and South Korea. (****)

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