Saturday January 20, 1996
G7 TALKS AIM AT GENERATING GROWTH, JOBS
PARIS (Reuter) -- Economic policy-makers from the world's
richest nations were arriving in Paris Saturday for talks aimed
at reviving flagging economic growth and tackling
stubbornly-high unemployment rates.
The slowdown in economies, particularly in Europe, was to be
the main focus as finance ministers and central bankers from the
Group of Seven tried to stop the 1990s being written-off as a
decade of debt, deflation and derisory economic expansion.
"Growth will dominate the agenda. Currencies will be
discussed as they always are but economic growth rates will be
the main focus,'' a British monetary official said.
Treasury Secretary Robert Rubin said late Friday that the
slowdown in Europe was "not helpful.''
Though the United States also faces a cooling in its
economy, and Japan has been slow to recover, Europe,
particularly France and Germany, faces stagnation.
Deputy Treasury Secretary Lawrence Summers said on Friday
the meeting would touch on high jobless rates in Europe.
"Unemployment is far too high in Europe by anybody's measure.''
But the G7 -- the United States, Germany, Japan, France,
Italy, Canada and Britain -- was not expected to find any
miracle cure to revive world growth and get people back to work
at the half-day talks Saturday afternoon.
While G7 nations have been quick to trim interest rates,
they appear to have little choice but to keep cutting them until
more lively economic activity returns.
Britain has cut interest rates twice in five weeks and
France and Germany eased monetary conditions last week.
And Germany, powerhouse of the European economy, was
expected to be encouraged to lower interest rates further.
G7 leaders are worried Europe could slide back into
recession, pushing more people out or work, feeding social
unrest and damaging plans for closer economic union.
Rubin said Friday Europe faced a conflict beween meeting the
tight budget criteria required ahead of European monetary union
and the slowdown in economic growth coupled with rising
unemployment.
The spotlight was also likely to fall on the dollar, which
rallied sharply ahead of the meeting on expectations the G7
would warmly applaud its rally over the past nine months.
The dollar surged to 1.4840 marks late Friday from 1.4690
marks late in the European day Thursday.
