Sunday, May 18, 2003
Sunday, May 18, 2003 |
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``We favour the emergence, through open and public processes involving the private sector, of high quality internationally recognised accounting standards,'' the G-8 agreed, according to a draft statement. The collapse of U.S. energy trader Enron Corp., telecoms firm WorldCom Inc. and numerous firms on Germany's Neuer Markt has shattered confidence in company reporting both in the U.S. and Europe in the past two years. In response, European Union nations have agreed to harmonise accounts of listed firms according to International Accounting Standards (IAS) and the U.S. has agreed to work towards convergence between IAS and its own Generally Accepted Accounting Principle (GAAP) standard. For years the U.S. had refused to recognise any accounting standard apart from its own, much to the annoyance of European firms seeking to list on U.S. markets and forced by the Securities and Exchanges Commission (SEC) to adopt U.S. GAAP. The G-8 did not say by when it would like to see an agreement reached on common standards, or whether the goal was co-existence of IAS and U.S. GAAP or a single new standard. Earlier, the meeting began with France urging the countries not to let differences over Iraq stand in the way of a coordinated effort to give the global economy a much-needed boost. "We need to stand together to look for ways to ensure strong and sustainable growth," said the French Finance Minister, Francis Mer, who is hosting the meeting of the Group of Eight in this seaside resort in Normandy. The meeting comes amid heightened fears that Germany — Europe's biggest economy — is on the verge of recession and that the Japanese economy could be in a deflationary spiral. "Affirming confidence in strength of our economies and regaining a taste for initiative — these are the challenges to tackle," Mr. Mer said. But the Ministers were also expected to discuss European concerns about the decline of the dollar, which this week hit a new four-year low against the euro. A strong dollar makes it more expensive for Americans to buy European goods and services, which is bad news for Europe's struggling economies. Meanwhile, outside the beach club where the talks were underway, some 500 anti-globalisation protesters, who gathered outside the meeting venue, denounced the G-8. A dozen buses filled with police officers in full riot gear looked on. — AP
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