STOLTENBERG SEES MOVES TO STRENGTHEN PARIS ACCORD
West German Finance Minister Gerhard
Stoltenberg said today's meetings of major industrial countries
would look at ways of strengthening the Paris accord on
stabilizing foreign exchange rates.
    Stoltenberg told journalists he saw no fundamental weakness
of the February 22 agreement of the Group of Five countries and
Canada to keep exchange rates near the then-current levels.
    But he declined to say what measures would be discussed
ahead of a communique of the Group of Seven ministers later
today.
    Stoltenberg and Bundesbank President Karl Otto Poehl said
the importance of the Paris agreement, also known as the Louvre
accord, had been underestimated.
    Stoltenberg said there is greater agreement now among major
countries than six months ago, at the time of the annual
meeting of the International Monetary Fund and World Bank,
marked by sharp discord between the United States and its major
trading partners.
    "There is no fundamental weakness of the Paris accord," he
said. "We will be looking at ways of strengthening it, but I do
not want to discuss that here.
    Stoltenberg said the Louvre agreement was working despite a
"slight firming" of the yen against the dollar.
    And Poehl noted that the dollar/mark parity was unchanged
since February 22 without the Bundesbank having had to sell
marks to support the dollar.
    "The Louvre agreement has been honored by the market," he
said.
    Poehl said West Germany had lived up to its side of the
bargain in Paris by preparing the way for tax cuts to be
accelerated as a way of stimulating growth.
    Poehl said, however, that Japan had not yet fulfilled its
pledges for economic stimulation.
    "And we will have to see if the United States is able to do
what they promised in Paris on reducing the budget deficit --
and get it through Congress," he added.
    Stoltenberg reiterated West German concern about a further
fall in the dollar, noting that the mark was up 85 pct against
the dollar and nearly 20 pct on a trade-weighted basis.
    "You cannot expect that to go unnoticed in an economy. And
it is not just a German problem, it is a European problem," he
said.
 REUTER
