Bonn launches fresh bid to secure G7 seats for euro-zone ministers

Date: 20/05/1999

By Tim Jones

EURO-ZONE governments are calling on incoming US Treasury Secretary Lawrence Summers to drop his opposition to allowing Finnish and Portuguese ministers to attend meetings of the world's top monetary chiefs.

German Finance Minister Hans Eichel has contacted the newly nominated Summers to try to convince him that chairmen of the Euro-11 ministerial coordinating group should represent the whole single currency area at Group of Seven meetings.

" This is becoming really imperative," said a senior EU monetary official, pointing out that Finland and then Portugal will take over the presidency of the Union for six months each from July.

At their Vienna summit last December, EU leaders agreed that the euro area should be represented at G7 meetings by European Central Bank President Wim Duisenberg and the Euro-11 chairman and that the two should be "assisted by the Commission".

Euroland is currently represented by German, Italian and French finance ministers and central bank governors, together with Duisenberg. The European Commission is invited if balance-of-payments aid to the former Soviet Union is being discussed.

Retiring US Treasury Secretary Robert Rubin opposed attempts to bring in the Euro-11 chairman, arguing that it would "formalise" the G7 and stifle a forum which thrives on the free flow of ideas. Summers, who has acted as Rubin's international policy chief since 1993, has been even more vehemently opposed to G7 enlargement.

In a bid to secure a deal before he hosts a G7 finance meeting in February on 12 June, Eichel put an Irish, Belgian and Finnish idea to the Americans: that Bundesbank president Hans Tietmeyer's retirement in September should be used as a catalyst for removing all euro-area national central bank governors from the G7 delegation. This would disqualify incoming Bundesbank chief Ernst Welteke, Bank of France governor Jean-Claude Trichet and the Bank of Italy's Antonio Fazio.

" Summers did not bite at this," said the monetary official. "He would rather have these three at G7 finance than a minister from a small country reading a statement."

The EU's powerful Economic and Financial Committee was trying to put together a new compromise which would be acceptable to the Americans at a meeting in Salzburg this week.