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Finance Ministers' Meetings

Statement of the G7 Finance Ministers and Central Bank Governors

May 6, 1990

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 May 6, 1990, in Washington, for an exchange of views on current global economic and financial issues. The Managing Director of the IMF participated in the discussions on recent economic developments in the Group of Seven.

The Ministers and Governors reviewed developments in their economies and in global financial markets since their meeting of April 7. They noted with satisfaction the recent stability in exchange markets and continued growth in industrial countries. However, they agreed that price pressures warrant continued vigilance. They also noted the yen had stabilized since their meeting in Paris, but remained of the view that the present level may have undesirable consequences for the global adjustment process. They discussed recent developments towards German economic and monetary union. They agreed that this process would contribute to improved non-inflationary global growth and to a reduction of external imbalances. This process would also contribute to positive economic developments in Eastern Europe which at the same time are supported by the international community.

They agreed to keep economic and monetary developments under review and reaffirmed their commitment to economic policy coordination, including cooperation on exchange markets.

The Ministers and Governors underscored their determination to resist protectionism. They emphasized that a successful conclusion of the Uruguay Round is essential for promoting an open and growing world economy.

The Ministers and Governors expressed their continued strong support for the strengthened debt strategy, and were encouraged by the substantial progress which has been achieved, including the commercial bank accords with six heavily indebted countries. They reaffirmed their support fore the case-by-case approach and for the guidelines governing Fund and bank financial support for debt and debt service reduction. They reemphasized the central importance of sustained debtor reforms and urged a stronger emphasis in Fund and bank programs on measures to attract new investment and a return of flight capital as new sources of finance for debtor nations.

The Ministers and Governors also discussed the Ninth Review of Quotas of the International Monetary Fund. They agreed that a 50 percent increase in IMF quotas would provide the Fund with the resources to fulfill its central responsibilities in the world economy. They also agreed on the need for strengthening the IMF arrears strategy as an integral part of the quota review.

Source: Canada, Department of Finance.

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