The US, one of the only two G7 countries, with Canada, to have decisively emerged from recession, pleaded at the meeting in London for assistance in reviving the world economy. Japan reassured its partners it was piloting a fiscal stimulus package through parliament and optimism grew that the German Bundesbank was on the verge of a fresh cut in interest rates.
Lloyd Bentsen, the new US Treasury Secretary, said the US plan to cut its deficitwas laying the basis for a world recovery. But he added: 'We alone cannot guarantee prosperity for the world. If we work together we'll prosper together.'
Helmut Schlesinger, the Bundesbank President, hinted that there was room for German interest rate cuts. And Norman Lamont, the Chancellor, said lower German rates would be of 'considerable benefit' to the whole of Europe. A fall in German rates will almost certainly open the prospect of fresh reductions elsewhere in Europe.
There was unanimous agreement at yesterday's talks in London that after a bad performance in 1992, when the Seven failed to conclude world trade talks and appeared powerless when confronted by the European currency crisis, they now had to work together.
Although no new measures were agreed at the meeting, Mr Bentsen hinted at co-operative decisions to boost world growth this year. 'We have a commitment to restoring a G7 process which is credible and which produces substantive results.'
The Seven decided that the basis of an international upturn would result from Congressional passage of the US deficit plan, Japanese parliamentary approval of Tokyo's pounds 62bn boost to public spending and the European Community's agreement to spend E24bn in public and private finance of infrastructure projects.Reuse content