Brown has upbeat message for G7

The risk of a renewed slump in the world's economy has receded and the most recent evidence has been encouraging, the Chancellor said yesterday.

Gordon Brown told his colleagues on the Group of Seven rich nations that signs of renewed hope opened a "window of opportunity'' to push through essential reforms to maximise the economic revival. He said that Europe in particular needed to push ahead with radical reform in the run up to the accession of 10 new countries to the European Union.

Mr Brown told G7 finance ministers meeting in Deauville, France that the world economy faced "testing and uncertain times'' after the Iraqi war, an economic downturn and the outbreak of the Sars virus.

But he went on: "There have been recent encouraging signs most notably the stability of the oil price, improvements in some confidence indicators and rises on the stock market.

"There is a window of opportunity as the downside risks to the global economy diminish and the prospects for global growth improve.''

In a message predominantly aimed at the Central European powers that are on the brink of recession, Mr Brown urged them to "break out of the old cycle of slow growth and rising unemployment''. He said the G7 needed to exploit an "emerging consensus'' to tackle structural reform and, in a key phrase, increase their resilience to shocks. This is important as it forms one of the Chancellor's five economic tests for membership of the euro that he will unveil on 9 June.