Atlantic Council

The G7 warned against protectionist measures earlier today, AP reports.

Rejecting protectionism, the Group of Seven finance ministers pledged Saturday to work together to support growth and employment and to strengthen the banking system so the world can overcome its worst financial crisis in 50 years.

But the bad news continues. The final statement on their two-day meeting in Rome also predicts a gloomy forecast, with the severe economic downturn continuing through most of 2009.

The G-7 ministers warned that any protectionist measures to boost national economies would only undermine global prosperity. They also stressed the need to support developing countries to prevent the world's poorest from being the biggest losers in the downturn.  "The stabilization of the global economy and financial markets remains our highest priority," the statement said, noting that the world's seven most industrialized countries have "collectively taken exceptional measures" to address the challenges.

The statement endorses the U.S. and British approach to fixing the banking system by recapitalizing banks. The ministers also said a way must be found to deal with the banks' toxic assets, however no prescription was laid out.

All indications, unfortunately, are that legislatures of the seven countries will not be as wise as their ministers.  Virtually all of them are facing enormous pressure to do otherwise.  And, indeed, the largest economy among them -- the United States -- acted accordingly overnight, as Reuters reports: "the U.S. Congress approved a $787 billion economic stimulus package, which would require public infrastructure projects use U.S. steel and goods under a 'Buy America' clause." Timonthy Geithner's boss, President Obama, will almost certainly sign it.

James Joyner is managing editor of the Atlantic Council.  AP Photo.