G7 ministers fail to agree private sector rescue role
Diane Coyle in Washington reports on plans to ease hardship and handle future crises
Tuesday 27 April 1999
Although they are determined that the private sector must share the burden in future IMF rescues, little progress is expected in the near future.
However, the G7 did reach agreement on plans to sell some of the IMF's $30bn gold reserves to finance a more generous programme of debt relief for the world's poorest countries. Details of the plan are likely to be announced by G7 leaders at their June summit, but the Chancellor, Gordon Brown, urged the sale of at least $3bn of IMF gold to generate extra funds for debt relief.
This was the first G7 meeting in almost two years at which there was a sense that the world economic position had begun to improve, senior officials said. Although there are fears about over-dependence on US growth, ministers were cautiously optimistic that the economic and financial crisis is over. European officials stressed that the EU was playing its part in boosting growth.
The meeting discussed the likely impact of the war in the Balkans. This is not expected to damage the world economy as a whole, but the International Monetary Fund and World Bank will begin to plan for the post-war reconstruction of the region.
The failure to agree on private-sector involvement in crises hinged on the question of whether the IMF ought to draw up a set of rules governing private lending to emerging markets, or whether crises should be settled on a case-by-case basis. Mr Brown strongly urges the former, while Robert Rubin, the US Treasury Secretary, favours the latter.
The US is determined that private lenders will share the burden. Larry Summers, the Deputy Treasury Secretary, said on Sunday that creditors must not expect "with absolute certainty" to be repaid on time.
However, the US is concerned about a possible lender backlash that would further slow the already paltry flows of new investment to emerging economies. The Institute of International Finance, an association of bankers, stressed this in response to Mr Summers' speech at its conference.
Returning to the stage after 20 years makes actress feel 'nauseous'
Top conservatoire offers ‘groundbreaking’ arts degree
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 Grandmas keep accidentally tagging themselves as Grandmaster Flash on Facebook
- 4 Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
- 5 Kanye West stops concert after two fans don't stand up - doesn't realise one is in wheelchair and the other disabled
Islamic State: Pope is 'being targeted by Isis', Iraqi ambassador to the Holy See warns
Jennifer Lawrence and Kate Upton nude pictures exhibition cancelled after artist concedes photos were 'stolen property'
Scottish independence referendum: A nation divided against itself
John Travolta addresses former pilot's gay romance allegations publicly for the first time: 'That was the lowest I'd ever felt'
Richard III: Two years after his body was found scientists discover how he died
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Portuguese academic says British are 'filthy, violent and drunk'
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...