Financial Post Articles
German Finance Minister Theo Waigel will travel to South Korea, Thailand and Indonesia in mid- February, just before the Group of Seven, plus Russian finance ministers and heads of government, meet in London on Feb. 21, the German finance ministry said yesterday.
Waigel will be seeking information on the Asian market crisis during his trip from Feb. 16 to Feb. 20, said Boris Knapp, a finance ministry spokesman. Though German commercial banks and some state-owned banks have made billions of marks in loans in Asia, Waigel will concentrate on International Monetary Fund aid programs in the region, Knapp said.
Since late last year, currencies in countries from Thailand to Japan have depreciated, stock indexes have plunged and financial institutions have run aground. The IMF has stepped in to bail out countries such as South Korea.
A finance ministry spokeswoman said Germany, which with Japan is the second-largest contributor to the IMF after the U.S., has a vested interest in the distribution of aid packages to those countries.
``German bank exposure and Germany's large IMF stake make the German finance minister an obvious choice for the job at this stage of the crisis -- as the dust settles, for now,'' said Alison Cottrell, an economist at PaineWebber International in London. The timing, ahead of the G7 meeting, ``will lend weight to his trip,'' even if his G7 role is unofficial, she added.
The finance ministry spokeswoman said Waigel wouldn't be going to Asia as an official representative of the G7, though the minister probably would brief his G7 colleagues on his findings.
``The minister is going in his capacity as German federal finance minister, availing himself of what I suppose you could call a standing invitation,'' she said.
The G7 finance ministers have yet to make a joint statement on Asian market developments, though the European G7 finance ministers from France, Germany, Italy and Britain did write to Japan in autumn 1997 to express their concern at market developments there.
In addition, by the end of Waigel's trip, commercial bank aid programs should be clarified.
Yesterday, South Korea began a second round of talks with creditor banks in New York, closing in on a plan to exchange about US$25 billion of commercial bank debt for longer-term loans. An agreement would remove the threat of default and shore up Korea's foreign exchange reserves.
Banks are also trying to find ways to funnel money to Indonesian companies saddled with US$65 billion in foreign-denominated debt on which they're likely to default.
In addition, Japanese vice-finance minister Eisuke Sakakibara said the IMF and industrialized countries will take steps this week to help out Indonesia, though he failed to give details. The IMF has already set up a US$40-billion international loan package for Indonesia in exchange for economic reforms.
The IMF is also sending a delegate to Korea to negotiated the re-adjustment of the country's macroeconomic targets.
|This Information System is provided by the University of Toronto Library and the G7 Research Group at the University of Toronto.|
Please send comments to: email@example.com
Revised: April 21, 1998.
All contents copyright, 1997 University of Toronto unless otherwise
stated. All rights reserved.