Equity markets and capital spending in general should return to "normalcy" once the Iraq situation is resolved, the US treasury secretary Mr John Snow has told a meeting of the world's most powerful economies in Paris.
Mr Snow made his comments at the G7 meeting, where finance ministers attempted to put on a brave face as war in Iraq loomed. While there is little political agreement on the Iraqi crisis, the ministers agreed that G7 economies had underlying strengths that would become apparent once the crisis passed.
France began its one-year presidency of the group of the world's seven wealthiest nations in inauspicious circumstances.
As the closing statement of the meeting of finance ministers and central bank governors noted: "Our economies are experiencing slower growth."
Neither the document nor the meeting's chairman, the French Finance Minister Mr Francis Mer, used the words "Iraq" or "war", but the meaning of the statement's second sentence - "Geopolitical uncertainties have increased" - was clear.
Despite tension over Iraq and the economic downturn, the ministers sought to put the best construction on the situation, saying they "remain confident in the underlying strength of our economies and their capacity to grow more vigorously".
They papered over differences on US fiscal policy, higher interest rates in the euro zone and trade protectionism by agreeing economic growth was their shared priority.
"We decided to gear all our energies towards growth," Mr Mer said. "This is a principle which surprisingly was never addressed in 20 or 30 years. Why now? Because we are in a period where we can sense imminent recovery. We are now poised to rebound and take off again."
Mr Mer then tempered his assessment. "It may not happen tomorrow, since the world is under a cloud of uncertainty, which we hope will be resolved as soon as possible."
Mr Snow said there was "a consensus that early resolution of the geopolitical issues surrounding the Iraqi situation would be beneficial, and once resolved there would be fairly quick return to normalcy in equity markets, capital spending and corporate behaviour".
Though the G7 countries are deeply divided over Iraq, a German journalist was the only person to broach the subject, asking Mr Snow why the US was undermining the world economy with talk of war. Mr Mer put everyone on notice that discussing a Gulf war "does not fall within our purview".
The ministers "decided it was useless to go into details on the possible scenarios", he said when the meeting closed on Saturday evening. But they would reconvene if a war started.
"What counts is that together, we react sufficiently. We have no hidden agenda," he added.
European Central Bank (ECB) President Mr Wim Duisenberg implied he might cut interest rates in the euro zone to encourage economic activity. "We will not hesitate to act," Mr Duisenberg said.
