industrial democracies can produce a workable system to co-ordinate their economic policies through the Economic Summit's new Finance Ministers Group.
The Group of Seven ministers, including Canada and Italy for the first time, have been charged with examining each member's economic and financial policy positions through a wide range of indicators. It is then charged with delicately urging correction when any of those policies are out of sync with the group at large.
Much detail is still to be worked out on how the G-7 group will go about its work. Whatever sort of mechanism evolves, it's important that the group recognizes successful policy directions and doesn't try to move toward the lowest-common economic denominator. Some of the summit members have been a little too anxious to get Japan and West Germany to readjust their economic policies, rather than looking at what part of those countries' fiscal approach they may perhaps emulate.
That said, however, the recent success in co-ordinating a reduction in interest rates and a realignment of key currencies among major summit countries is welcome evidence that some degree of balancing of international economic policies is once more acceptable. There was little point in going through the exercise had a leading nation like the U.S. remained ideologically opposed to international economic co-ordination of any kind.
Much of the impetus for formalizing the consultative process in the new G-7 Finance ministers body originated with Canada, which feared being left out of existing ad hoc co-ordinating arrangements. It is to Prime Minister Brian Mulroney's credit that he pressed for this in the face of strong resistance, first by politicians and then by their bureaucrats.
There are lots of places where politicians meet internationally to talk about their economic problems. Admittedly, the Economic Summit produces more than its share of purposeful rhetoric and overblown expectations. But if it succeeds every once in a while in the difficult task of economic co-operation, it's worth the candle.
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Revised: June 3, 1995
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