|G7 leaders seek consensus on coping with
BOCA RATON, Fla. - World financial leaders
meeting in Florida struggled yesterday for consensus on how to steady
global currency markets amid European and Japanese worries a sliding U.S.
dollar could spin out of control.
While comforted by a global economic recovery in the
past six months, many finance ministers and central bankers from the Group
of Seven wealthy nations are anxious about the potential currency fallout
from huge U.S. trade and budget deficits.
The dollar's deficit-driven slide has accelerated since the G7 last met in
Dubai in September and concluded that more flexible currency policies were
needed around the world.
That statement was taken by most observers as a dig at countries like
China that fix their currencies to the U.S. dollar. But European ministers
say this needs to be spelled out in the statement that will follow the
Boca Raton meeting.
Italian Finance Minister Giulio Tremonti said European ministers might
push to alter the wording thrashed out in Dubai so it is clearly aimed at
The euro has risen some 10 percent against the dollar since the Dubai
gathering, pinching European exporters. "The hypothesis from the
European side is referring to the need for more flexibility of Asian
currencies," Tremonti told reporters yesterday.
One way to ease European concerns might to be to "tweak" the
Dubai statement to say that while flexibility was desirable, excessive
volatility in relative currency values was not- a bow to Europe's fears
its recovery could be stifled by a soaring euro that makes its exports
German Finance Minister Hans Eichel said as the formal G7 meeting began
there was a general agreement that some progress must be made on currency
policy, although what form that will take remained uncertain.
"We are all trying to find a common position," Eichel said of
his counterparts from the United States, Britain, Canada, France, Italy
and Japan. "Everybody knows that currency, which is a very sensitive
subject, will be a main discussion point."
Other European officials, hinted at movement toward an agreement on the
statement's language between the opening dinner on Friday night and the
formal G7 sessions yesterday. "Things have moved forward since
yesterday evening," a European delegate said. "It's moving
towards a clarification."
Japan also wants more stable exchange rates, which would save it money by
requiring fewer forays into currency markets, while reserving the right to
buy dollars if needed to keep the yen from rising too fast. But it likely
would oppose a broad reference to Asian currency flexibility because this
would be seen by markets as a rebuke from G7 for Tokyo's unilateral
Japan's Finance Minister Sadakazu Tanigaki told U.S. Treasury Secretary
John Snow before the formal meeting yesterday that Japan would continue to
act to cap the yen if it moved out of line with the underlying economy.
How can we manifest peace on
earth if we do not include everyone (all races, all nations, all religions, both
sexes) in our vision of Peace?
The WorldPeace Banner
To order a WorldPeace Insignia lapel pin, go to: Order
To the John WorldPeace Galleries Page
To the WorldPeace Peace Page