Brussels, 18/04/2005 (Agence Europe) - Meeting in Washington on Saturday and Sunday, for the spring meetings of the International Monetary Fund (IMF) and the World Bank, the finance ministers of the group of the seven most industrialised countries (United States, Canada, Japan, UK, France, Germany and Italy) failed to make much headway, either on points related to development or on the fight against global economic imbalance.
A G7 press release recognises that more funds should be made available to fight poverty, but agreement on the details of the operation has been postponed until the G7 Summit scheduled for 6-8 July in Gleneagles, Scotland. At this point, neither the proposed taxation on airline tickets to pay for development aid, nor the sales of IMF gold reserves to cover any cancellation of debt are supported unanimously. In view of the opposition of the US, the second may well be jettisoned altogether, the German Secretary of State for Finance, Caio Koch-Weser, told Reuters. Stating that “everyone now accepts the idea that more money is needed”, the Chancellor of the Exchequer Gordon Brown said “I still hope that there will be a global initiative (…) and that all continents and all of the biggest countries get together in a common project” (to fight poverty), he said. The European Commissioner for Economic and Monetary Affairs, Joaquin Almunia, pragmatically stated that “there was no great leap forward on these issues”.
World growth will be “robust” in 2005, despite the hike in oil prices, the press release added, stating that the high price of oil “is a brake on world growth”. On this, differences in approach subsist between Europeans and Americans, over energy savings versus an increase in production. Overall, the imbalances of the world economy will be the object of “vigorous action”, the ministers state, having shown particular concern about the level of twin deficits (trade and budget) and the savings situation in the United States. The President of the Ecofin Council, Jean-Claude Juncker, said that Europe would remain committed to structural reforms, “but would not fall into the trap of liberalisation without let or hindrance and abandoning the European social model”. The President of the European Central Bank, Jean-Claude Trichet, told the press that a drop in rates was “not an option” to relaunch euro zone activity. The G7 ministers also reiterated the message they first launched a year ago, calling for greater flexibility in the exchange rates. Without getting tough in their tone towards China (which did not attend the meetings), they once against regretted the consequences of indexing the Yuan on the dollar and the advantages of this for the Chinese economy. The American Secretary of the Treasury, John Snow, told journalists that “it is time to move on to the next stage and make progress towards greater monetary flexibility”.