DAVOS (Switzerland). Feb 1 With the world economy stubbornly weak, business and political leaders are looking to US President Bill Clinton to lead the way to global recovery, reports Reuter.

A bold proposal that Clinton should call a special spring summit of the Group of Seven ( G7) rich industrial nations to forge a programme for growth was welcomed by many of the 1,500 participants at the annual stx-day world economic forum here.

But a US decision to levy dumping penalties on foreign steel also raised anxiety that Clinton may start to move the United States along the road to protectionism.

They're trorrled about the new US administration," Massachusetts Governor William Weld said.

The idea for a 07 meeting came from Fred Bergsten. a top US economist and former government official, who said the 07 had fallen into disrepair and needed reinvigoration as the world entered its third year of "virtual stagnation".

His recipe for growth included substantial extra Japanese fiscal stimulus, a 20 per cent yen appreciation, fiscal tightening in Germany, and interest rate cuts in all major countries.

Former Bundesbank President Karl Otto Poehl said he "strongly supported" the idea for more G7 coordination.

Half way through the conference the 10 per cent devaluation of the Irish punt tn the European monetary system came as a reminder of the strains Germany's high interest rate policy has put on its European Community partners

The general mood at the conference, which ends Tuesday. Is of gloom about the state of the world economy and the stalling of the six-year Uruguay Round talks to liberalise world trade

The US steel dumping decision last Wednesday has made many question whether Clinton can be counted on to help rescue the trade talks, which have stumbled mainly over differences between the US and the EC.

But others warned against reading too much Into the dumping decision. They sold It was preliminary and the outcome of a process begun under the previous Bush administration.

But there was general agreement a new world trade treaty could not be reached before the present US deadline for an accord runs out in four weeks.

GATT Director General Arthur Dunkel did not say how he thought the situation could be resolved, but senior EC officials said Clinton aides had signalled the deadline could be put back.

Argentine President Carlos Menem summed up Latin American worries about the lack of progress on the Uruguay Round.

Failure would force us to repeat past errors. Increase poverty in our countries and lead to the formation of trad Ing blocs. The promise of a new economic order would rapidly fade," he said

As at last year s forum, the need to help the economic and political reforms of the former communist countries of eastern and central Europe was high on the agenda.

West European speakers said that while the EC pursued its goal of economic and political union based on the Maastricht accord, it must not lose sight of the potential dangers on its eastern doorstep.

"If eastern and central Europe go down the drain, if political instability and war start erupt in those regions. I don't think it will help much to talk about Maastricht because' we might lose a lot of what we gained in the West," David de Pury. Co-Chairman of Swiss-Swedish engineering group ABB said.

New Russian Prime Minister Viktor Chernomyr din. on his first foreign trip since taking office six weeks ago, assured the conference he would push ahead with radical economic reform. Speculation he might switch from market policies, he said: we are not only for reform, but we intend to deepen and broaden it.