G7 ministers fail to agree private sector rescue role

Diane Coyle in Washington reports on plans to ease hardship and handle future crises

FINANCE MINISTERS and central bankers from the Group of Seven industrial countries failed to agree yesterday on how to make private- sector lenders take part in future international financial rescues.

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.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Day In a Page

Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea