Governments came under mounting pressure on Tuesday not to resort to protectionism to cushion themselves from the impact of the economic slowdown as unemployment levels grew and exports dwindled.
While Australia unveiled a stimulus package designed to safeguard tens of thousands of jobs, President Barack Obama was urged to ditch a "Buy America" clause in his own 900-billion-dollar bid to revive the ailing US economy.
Spain meanwhile became the latest leading European country to announce a sharp rise in unemployment, with the jobless rate hitting a 12-year high.
The head of the International Monetary Fund expressed hope that the world economy could stage a rapid recovery once it "regains its footing" but also urged countries to avoid protectionism during the slump.
"Beggar thy neighbour policies will never give a good result," Dominique Strauss-Kahn said in a speech in Tokyo.
The "Buy America" clause in Obama's stimulus package has sparked warnings of grave consequences from traditional US allies if it is approved by Congress.
The White House has said the clause -- aimed at ensuring only US steel, iron and manufactured goods are used on infrastructure projects designed to revive the economy -- is still under review.
Senators are currently reviewing the bill whose cost is now estimated at 888 billion dollars (692 billion euros) after new tax measures were added to the 819-billion-dollar version passed last week by the House of Representatives.
"I don't think we ought to use a measure that is supposed to be timely, temporary, and targeted to set off trade wars when the entire world is experiencing a downturn in the economy," Senate Republican minority leader Mitch McConnell told reporters.
Obama expressed hope that the Senate would give bipartisan support to the bill, which failed to win any Republican backing from the House but he admitted that gaps remained between the parties on the measure.
Wildcat strikes by workers at energy plants in Britain, which began last week over the use of foreign labour, continued on Tuesday despite calls from the governments of Portugal and Italy for action to end the protests.
"We want to underline the responsibility of government to avoid this protectionist, xenophobic, nationalist trend, which if not quickly curbed by strong government action, could lead us into an even deeper crisis," Lisbon's Foreign Minister Luis Amado said on Monday night.
In Spain, the number of people out of work rose to 3,327,000 in January, the highest level since 1996 when the current method of calculation was introduced.
The figure represented an increase of 1.065 million, or 47.12 per cent on an annual basis.
Germany, Europe's biggest economy, announced last week that unemployment had jumped 387,000 in January while France said on Monday the number of people out of work rose by 45,000 last month.
The impact on consumer spending was also highlighted in Germany where figures showed retail sales fell by an unexpected 0.2 per cent in December.
In Switzerland, data showed exports dropped by 10.8 per cent in the final month of 2008, as textiles, metals and plastics suffered the full brunt of the slump.
"Foreign trade hadn't received such a cold shower for years," the customs office added.
After launching his plan worth 42 billion dollars (26 billion US dollars), Australian Prime Minister Kevin Rudd said the aim was to support 90,000 jobs "in the face of the unfolding national and international economic emergency".
In a further bid to stimulate growth, Australia's central bank also slashed interest rates by one percentage point to a 45-year low of 3.25 per cent.
Japan's central bank said it would spend up to one trillion yen (11.2 billion dollars) to buy shares held by commercial banks as part of efforts to ease the credit crunch in Asia's biggest economy.
The announcement came as Japanese high-tech giant Hitachi, which is slashing up to 7,000 jobs, reported a 4.0-billion-dollar net loss for the nine months to December as the slowdown crushes demand for electronic goods.
While Australia unveiled a stimulus package designed to safeguard tens of thousands of jobs, President Barack Obama was urged to ditch a "Buy America" clause in his own 900-billion-dollar bid to revive the ailing US economy.
Spain meanwhile became the latest leading European country to announce a sharp rise in unemployment, with the jobless rate hitting a 12-year high.
The head of the International Monetary Fund expressed hope that the world economy could stage a rapid recovery once it "regains its footing" but also urged countries to avoid protectionism during the slump.
"Beggar thy neighbour policies will never give a good result," Dominique Strauss-Kahn said in a speech in Tokyo.
The "Buy America" clause in Obama's stimulus package has sparked warnings of grave consequences from traditional US allies if it is approved by Congress.
The White House has said the clause -- aimed at ensuring only US steel, iron and manufactured goods are used on infrastructure projects designed to revive the economy -- is still under review.
Senators are currently reviewing the bill whose cost is now estimated at 888 billion dollars (692 billion euros) after new tax measures were added to the 819-billion-dollar version passed last week by the House of Representatives.
"I don't think we ought to use a measure that is supposed to be timely, temporary, and targeted to set off trade wars when the entire world is experiencing a downturn in the economy," Senate Republican minority leader Mitch McConnell told reporters.
Obama expressed hope that the Senate would give bipartisan support to the bill, which failed to win any Republican backing from the House but he admitted that gaps remained between the parties on the measure.
Wildcat strikes by workers at energy plants in Britain, which began last week over the use of foreign labour, continued on Tuesday despite calls from the governments of Portugal and Italy for action to end the protests.
"We want to underline the responsibility of government to avoid this protectionist, xenophobic, nationalist trend, which if not quickly curbed by strong government action, could lead us into an even deeper crisis," Lisbon's Foreign Minister Luis Amado said on Monday night.
In Spain, the number of people out of work rose to 3,327,000 in January, the highest level since 1996 when the current method of calculation was introduced.
The figure represented an increase of 1.065 million, or 47.12 per cent on an annual basis.
Germany, Europe's biggest economy, announced last week that unemployment had jumped 387,000 in January while France said on Monday the number of people out of work rose by 45,000 last month.
The impact on consumer spending was also highlighted in Germany where figures showed retail sales fell by an unexpected 0.2 per cent in December.
In Switzerland, data showed exports dropped by 10.8 per cent in the final month of 2008, as textiles, metals and plastics suffered the full brunt of the slump.
"Foreign trade hadn't received such a cold shower for years," the customs office added.
After launching his plan worth 42 billion dollars (26 billion US dollars), Australian Prime Minister Kevin Rudd said the aim was to support 90,000 jobs "in the face of the unfolding national and international economic emergency".
In a further bid to stimulate growth, Australia's central bank also slashed interest rates by one percentage point to a 45-year low of 3.25 per cent.
Japan's central bank said it would spend up to one trillion yen (11.2 billion dollars) to buy shares held by commercial banks as part of efforts to ease the credit crunch in Asia's biggest economy.
The announcement came as Japanese high-tech giant Hitachi, which is slashing up to 7,000 jobs, reported a 4.0-billion-dollar net loss for the nine months to December as the slowdown crushes demand for electronic goods.
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