G7 countries ponder common oil policy
By Peter Ehrlich and Ralph Atkins in Berlin, and Christopher Adams in London
Published: September 14 2000 19:17GMT | Last Updated: September 14 2000 20:46GMT
The world's leading industrial nations are discussing
forging a joint position on soaring oil prices and the euro,
dollar and yen exchange rates.
Initial contacts between members of the Group of Seven
industrial nations have already taken place on the level of
the officials or "sherpas" who prepare summit meetings,
according to government officials in Berlin.
In Britain the Treasury confirmed that Gordon Brown, the
UK chancellor, will also use the forthcoming G7 meeting of finance ministers in
Prague to push for a statement demanding action to deal with the rise in oil
prices. He is expected to press G7 counterparts to apply pressure on Opec
oil-producing nations to raise output to drive down the price of crude.
Downing Street, meanwhile, said that it had not received an approach from
Germany suggesting the G8 heads of state summit be used similarly. But it
added: "In general terms, we are interested in any practical ways where pressure
can be brought to bear on oil-producing powers and on Opec in particular to
reduce the oil price."
Both initiatives could help send important signals to financial markets - but also to
the thousands of lorry drivers and farmers who continued to protest across
Europe on Thursday demanding governments provide compensation for the
crippling costs on fuel-dependent businesses.
So far contacts at the head of state level within Europe appear to have been scant
with Berlin officials saying Tony Blair, UK prime minister, and Gerhard Schroder,
the German chancellor, had not spoken by telephone on the petrol protests.
But Berlin officials point out that the G7 club dates from the 1975 world economic
summit that followed the oil and exchange rate crises of the early 1970s.
Unlike France, which ended blockade action by lorry drivers by offering tax cuts,
Germany and the UK have refused to contemplate reducing energy taxes.
Reiterating Berlin's stance, Caio Koch-Weser, deputy German finance minister,
said cuts "would not be economically, ecologically or politically sensible". If
European government's cut fuel taxes, it "would invite Opec to fill the space
created".
Mr Koch-Weser underlined the potential dangers to the economy of high oil prices
saying that if they remained at current levels, "International Monetary Fund forecast
for growth in the euro-zone next year could be cut by about 0.5 percentage points".
Separately, European Union transport ministers will discuss the crisis on
Wednesday and are expected to consider ways of exerting pressure on Opec to
raise output further and bring down crude prices.
German truck drivers on Thursday blocked temporarily a refinery in Lingen, near
the border with the Netherlands. But the protests remain below the scale seen in
France or Britain.
In Spain, Belgium, Holland and Ireland demonstrators also refused to surrender
in th eir battle to force governments to cut fuel taxes.
In Ireland, motorists rushed to fill their tanks after truckers threatened a 24-hour
stoppage from midnight on Thursday. |
