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To: goldsnow who wrote (32365)	4/22/1999 8:23:00 PM
From: Alex	Read Replies (1) \| Respond to of 116764

IMF gold sales in question................... 4/22/99 - U.S. Treasury Aide Says G-7 Concerned over Euro Weakness <Picture> --Treasury aide: G-7 to have normal FX discussion Monday By Elizabeth Price, Bridge News Washington--April 22--All members of the Group of 7 industrial nations are concerned over weakness in the euro, and the U.S. will stress the need at Monday"s G7 meeting here for Europe, Japan and other G7 members to take all measures needed to spur economic demand, a senior US Treasury official said today. But the official stressed that discussion of exchange rates will take place "in the normal discussion that always takes place." Despite encouraging signs of recovery among many emerging market economies, "there continue to be pockets of weakness," the senior Treasury official told reporters under condition of anonymity. For example, Russia and Indonesia continue to face severe economic conditions and even countries which have taken credible reform measures will "have a difficult road ahead," the official said. "That is why we think it is prudent to be uneasy about the outlook (for global economic growth) and why the demand the major industrial countries can produce is so crucial," the official said. In Japan, the government must use "all macro-policy tools at its disposal to sustain demand," the official said. Japan needs to continue to push financial and corporate restructuring, he added. The U.S. feels that European governments need to address structural problems, like the lack of labor market flexibility and cost, plus broader issues of how the tax code retards investment and innovation, the official said. On Monday, the G-7 participants will "spend a fair amount of time discussing Russia," the official said. He noted that there are still "many unresolved issues" between the IMF and Russia in their negotiations over new loans. The ultimate size of a loan package should be "relative to the amount of money Russia owes the IMF," the official said. The G-7 is likely to reach agreement for a proposal to set up a new contingent credit-line facility at the IMF, intended to benefit developing countries which pursue sound economic policies, but are vulnerable to financial crisis contagion, the official said. Consensus is also expected on proposals to increase transparency and improve regulation of capital markets, he said. But the official said he would be very surprised if final decisions are made over how to fund debt relief for the world"s poorest countries, the official said. IMF officials have said recently it is probable IMF members will reach agreement to sell a small portion of the IMF"s gold sales to fund debt relief. A deal on gold sales would likely be held up by the fact that many of the strongest advocates of debt relief are very unhappy with the conditions attached to the current program for distributing the money, the official said. Bridge News, Tel: (202) 662 7186 Send comments to Internet address: emerg@bridge.com