Asian and European economies face severe challenges from soaring fuel and food prices and global financial turbulence, France's finance minister cautioned.
"Of course, we would all prefer to be triple-A economies," Christine Lagarde told an Asia-Europe Meeting (ASEM) of finance ministers. Host nation South Korea is grappling with a crippling strike by truck drivers over high oil prices, the latest in a series of global protests against rising food and fuel costs.
"We have important economic and financial challenges in common," Lagarde said in a keynote speech to the two-day meeting on the resort island of Jeju. "Adverse shocks have affected our economies. So far, euro area growth has been resilient, and Asia as well, even if the impact of recent turmoil may affect all economies."
She said there were clear concerns "about prices of food and prices of fuel and social unrest that results from such movements".
"This is indeed amplified and far more dramatic in emerging economies and in the developing world, but clearly this is the issue we share," said Lagarde.
The Group of Eight finance ministers meeting in Osaka warned on Saturday that high oil and food prices pose "a serious challenge to stable growth worldwide" and may worsen poverty and stoke global inflation.
The Jeju meeting is being attended by finance ministers or their deputies from 27 EU countries and 16 Asian nations, plus officials from six international organisations.
"We certainly want to develop further growth and improve the resilience of the euro area," Lagarde told the meeting.
"That has been made particularly urgent because of the financial crisis that we have gone through. We want to improve the co-ordination of regulators."
Lagarde said low interest rates have helped Europe cushion external shocks but she was "anxious and worried" because of inflation.
"We want better supervision and better surveillance generally. We believe that will certainly reinforce the strength of the eurozone in the face of financial challenges," she said.
In addition to world economic challenges, the three main ASEM agenda topics will be regional economic integration, market-based approaches to climate change and co-operation on infrastructure finance and micro-finance.
Lagarde urged Asian nations to work to persuade their people of the benefits of economic integration, saying Europe had failed to do this effectively.
Irish voters last week rejected the Lisbon Treaty, the latest attempt by the European Union to strengthen its institutions to cope with expansion into Eastern Europe. "I think that one of the mistakes that we have made in terms of fostering and promoting integration has to do with communication," she said.
"When you move towards better integration, make sure that you always along the way communicate the positive outcome of that integration."
Lagarde said "the man and the woman in the street" were not necessarily aware of the benefits of integration. She cited job creation, greater investment flows and the role which the European Central bank played to ease the global financial crisis.
Europe's huge and growing trade shortfall with China is also expected to be among key topics at the meeting. (AFP)
Christine Lagarde called the slowdown in the US the biggest challenge to a global economy that faces rising oil and food prices and financial turmoil.
"Triple-F challenges" in finance, fuel and food threaten the global economy. These three are closely interrelated and to fix one we need to fix the others," she said.