G7 united on all but action, says France bank

24th January 2005, Comments 0 comments

PARIS, Jan 24 (AFP) - The Group of Seven industrialised countries share a vision of what should done to shore up the world economy and to secure euro-dollar stability but joint action remains complicated, French central bank governor Christian Noyer said here Monday.

PARIS, Jan 24 (AFP) - The Group of Seven industrialised countries share a vision of what should done to shore up the world economy and to secure euro-dollar stability but joint action remains complicated, French central bank governor Christian Noyer said here Monday.

Asked about what could be done to induce the United States to take steps to stem the slide of the dollar, Noyer told a news conference: "There is an overall vision that we are soon going to re-affirm in London and which is consensual.

"The task now is to put it into practice, which is always complicated."

Noyer was speaking following a meeting of the Franco-German economic and finance committee and just ahead of a G7 gathering of finance ministers and central bankers in London February 4-5.

Besides France and Germany, the G7 groups Britain, Canada, Italy, Japan and the United States.

"Each country has reforms or improvements to carry out in its own domain, in its own economy," Noyer said.

Economists have repeatedly warned that the United States cannot maintain its huge budget and current account deficits, which make foreign investors uneasy and reluctant to support the dollar.

"The United States cannot continue with such a deficit, it must work to balance savings and investment," Noyer argued.

"As for Europe, it must improve its growth potential by structural reform," he said, adding that Japan faced similar challenges.

"Major emerging economies in Asia must go in the direction of taking greater responsibility for global demand, which could come through modifications in exchange rates or in market opening."

At the same news conference, German central bank head Axel Weber said France and Germany should be able to hold their public deficits this year to less than three percent of gross domestic product, as stipulated in the EU's 1997 Stability and Growth Pact.

"I think that this year our two countries should be able to stay within the three percent limit, which would certainly give them more possibilities given an improvement in growth potential," he said.

"Stagnation in Europe has been largely overcome, growth remains modest but should pick up in the years to come."

© AFP

Subject: French News

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