The Finance Ministers and Central Bank Governors of Canada, France, the Federal Republic of Germany, Italy, Japan, the United Kingdom and the United States, met on April 7, 1990, in Paris, for an exchange of views oncurrent global economic and financial issues. The Managing Director of the IMF participated in the multilateral surveillance discussions.

The Ministers and Governors reviewed their economic policies and prospects. They noted that since their last meeting, economic growth had been slowing in several countries to more sustainable levels. However,overall growth prospects remain good, with strong investment providing a major stimulus to their economies, inflation remains contained andexternal imbalances have been reduced although unevenly.

The Ministers and Governors expressed the need for continued close coordination of their macro-economic and structural policies, to obtain sustained growth, low inflation and greater stability of exchange rates. In this respect, they agreed that current inflation rates require continued vigilance. They agreed that countries with fiscal and current account deficits should reduce budget deficits and increase private savings. They also agreed that countries with external surpluses should, at the same time, continue to contribute to external adjustment by promoting non-inflationary growth of domestic demand, through appropriate macro-economic and structural policies. They also agreed that savings should be promoted in all countries through the use of appropriate structural policies.

The Ministers and Governors discussed developments in global financial markets, especially the decline of the yen against other currencies, and its undesirable consequences for the global adjustment process, and agreed to keep these developments under review. They reaffirmed their commitment to economic policy coordination, including cooperation in exchange markets.

The Ministers and Governors welcomed the reforms in Eastern Europe towards market oriented economies which, they believe, are the most profound in decades. They expressed their willingness to contribute to the success of the ongoing process, through appropriate bilateral and multilateral assistance, through helping countries undergoing reforms to remove obstacles to private capital flows, and exchange of information and expertise. They reviewed and assessed the possible effects of these reforms. They noted that German economic and monetary union could contribute to improved global growth and to a reduction of external imbalances in Europe.

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Source: Canada, Dept. of Finance