The Jakarta Post reported that finance officials from the world's major countries believe the global economy is in far better shape than it was a year ago, but they are worried that a growing debt crisis in Greece could cause the hard won gains to unravel.

Some are also concerned about the failure so far to achieve consensus on the steps needed to toughen regulations to make sure the financial crisis that triggered the worst recession since the 1930s is not repeated.

Finance ministers and the heads of central banks from the Group of 20 major economies were participating in day-long talks Friday at the International Monetary Fund. The G 20 is composed of the world's richest industrial countries and fast-growing developing nations such as China, Brazil, South Korea and Russia.

The United States was being represented by Treasury Secretary Mr Tim Geithner and Federal Reserve Chairman Mr Ben Bernanke. The talks Friday were being held in advance of weekend meetings of key policymaking boards of the 186 nation IMF and its sister lending institution, the World Bank.

The administration is hoping the G 20 will endorse a set of financial reforms that will complement the sweeping overhaul that US President Mr Barack Obama is seeking to get approved in Congress. The US measure was scheduled for an initial showdown vote in the Senate on Monday.

The administration believes the United States, the world's largest economy, must show resolve in fixing the flaws exposed by the financial crisis or the momentum for global reform could falter. However, the G 20 nations were finding it tough to reach a consensus in a number of key areas, including a call by the IMF to boost taxes on financial institutions to pay for future bailouts.

Canadian finance minister Mr Jim Flaherty said that "I'm not going to impose a tax on our banks that performed well during the crisis."

Greek finance minister Mr George Papaconstantinou was scheduled to meet with IMF MD Mr Dominique Strauss Kahn on Saturday. Greece is seeking support from European governments and the IMF for a standby rescue package that it hopes it will not need.

The G 20 talks were being held at a time when the global economy is showing signs of improvement. The IMF released a new outlook for the meetings that forecast growth this year of 4.2%, significantly better tan the 0.6% drop in activity last year, the biggest plunge in the post World War II period.

The G 20 leaders will meet again in June in Toronto. The discussions among the finance officials were designed to make progress on the financial reform plan that will be presented to the leaders.

The finance officials were also debating ways to meet another goal set by leaders of pursuing more balanced global growth. Countries such as the United States are expected to show how they plan to narrow their trade and budget deficits while surplus countries such as China were expected to present plans for boosting domestic growth and relying less on exports.

(Sourced from www.thejakartapost.com)