MR. SIEWERT: One piece of housekeeping before we begin. The President's bilateral with Prime Minister Mori will take place -- has been rescheduled for tomorrow morning at 8:10 a.m., and that will be open to the pool press.

Lael Brainard will -- I have nothing new on schedule, and neither will Lael. She will have nothing new on the Mideast as well. She is here as the -- Lael Brainard is here as the sherpa. She'll discuss the G-7 meeting that just took place and answer questions about the G-8 meetings that are coming up. And without further ado, I'll bring her up.

We'll have a briefing later today on the Russian bilat, some senior administration officials. They can answer questions a little bit more in depth about the Russia meeting. And then Joe will be available for some questions about anything that you might want on the record, on camera later, involving Camp David or what's going on with the schedule.

But here's Lael.

MS. BRAINARD: The G-7 leaders met this afternoon to have the traditional session that precedes the official beginning of the G-8 Summit. They began by reviewing developments in the world economy and, generally, all noted favorable trends and talked about the generally positive outlook. They noted some risks, particularly with regard to the volatility of oil prices, and noted that greater stability in oil supply was in the mutual interests of both producing and consuming nations.

They also -- taking note of the positive trends, many emphasized that it's important not to become complacent at this juncture, that it's important to take advantage of this moment to move further on the areas of financial architecture, financial architecture reform, and also on the area of debt reduction.

In the area of financial architecture, they noted the steps that were being taken on IMF reform, on World Bank reform in particular, greater emphasis on the poorest -- a cleaner division of labor between the two organizations, and particular pricing of some of the facilities -- things that have been discussed by finance ministers over the course of the last year. Several also noted, with great appreciation that the G-20 has succeeded in efforts to broaden out those who were involved in setting some of the standards for the international financial institutions, and that that process seems to be going forward very positively.

On the area of debt reduction, there was a very lengthy and very good exchange. Many of them referenced the meeting that had taken place yesterday with leaders from the developing world and which gave greater impetus to the need to get the Cologne debt commitments implemented. They talked about how to get more of the countries who are eligible to their decision points so that they would actually start benefiting from debt relief. And they talked about how it's important for all of the different players -- the donor governments, the multilateral institutions, and the governments that are putting together poverty reduction strategies in order to get to eligibility -- for all of the different players to work harder on these goals.

They also talked a little bit in the area of financial crime. This year has been a very productive one. The finance ministers released a set of coordinated financial advisories based on the earlier work that had been done to notify particular countries that are not taking the necessary steps to combat money-laundering, and so there was a general discussion that that work program has been very productive this year.

That is, I think, a fairly good summary of the G-7 topics on the agenda. I'll also just note that a few of the leaders opened their remarks by welcoming warmly the President's efforts on the Middle East peace process, although that wasn't discussed at this meeting. The regional and security issues are slated to be discussed at the G-8 working dinner this evening.

Q Can you tell us, was there any discussion on the debt relief, about relaxing the terms? And are we likely to see some sort of statement coming out of this meeting if the terms are too stringent now and they need to be relaxed somewhat?

MS. BRAINARD: No, in fact, there was no concern expressed about the terms of debt relief. Several leaders talked about how important it was that debt relief be done in a context where there be a poverty reduction strategy, where there be a clear plan for how resources, freed up, would be used to ensure that people in the countries who are heavily indebted could actually see that their governments were using the funds in an accountable, transparent manner to actually invest in people, invest in health, and to ensure that the funds would not be misused.

So there was not particular focus on that. There was quite a bit of discussion and concern about some of the countries who are in conflict and thus unable to qualify, and efforts that could be taken to try to get those countries back on track.

Q Was there any discussion of Russia's debt, of Russia's request to get its international debt reduced?

MS. BRAINARD: There was some discussion in anticipation of the discussions later with President Putin of his economic reform program and the general intention or desire on the part of many of the G-7 countries to hear more from President Putin on what he's planning to do on the economic reform front, and also to work with him on that. There wasn't discussion of debt reduction.

Q Was there a discussion of debt rescheduling, and was there any common position taken on that? I'm speaking here of the Soviet era debt.

MS. BRAINARD: There was no discussion of debt rescheduling.

Q Germany has recently organized -- form of fiscal reform. Was that discussed? Was discussed the internal situation of the countries, of the member countries of the G-8?

MS. BRAINARD: Yes, each of the individual leaders did talk a little bit about the measures that they were taking to either keep their economies on track or to actually get growth sort of moving higher. And so there were some general discussions about the tax cuts in Germany and fiscal more generally, but not in any detail.

Q In the photo op, did the President say that America is in a soft landing, like Greenspan apparently said yesterday? Did he explain what the position is in America -- the American economy?

MS. BRAINARD: I don't want to characterize in any great detail the particular remarks of the leaders. I would say that the President reviewed the productivity, performance in our economy and some of the other trends in our economy, broadly speaking.

Q How much concern was expressed about the instability of oil prices, and what specifically did they talk about in terms of stabilizing those prices?

MS. BRAINARD: The discussion was a fairly broad discussion on all of the economic factors, and so I wouldn't say there were any measures discussed at all in that area, just simply with reference to what are the risks out there -- that was one of the factors mentioned.

Q Was there any disappointment expressed about the slow pace of debt relief since the G-8 -- for the poorest countries -- since the G-8 summit?

MS. BRAINARD: There was a discussion about how we can move forward more vigorously on implementation, and on the part of almost all the leaders a real sense that this is very high priority.

Q Was that from the position of debtor nations doing more to qualify for debt relief, or was it the more things the G-8 nations are willing to do to provide more debt relief?

MS. BRAINARD: No, the discussion really focused on the G-8 and what it is able to do to get that process more vigorously implemented.

Q Alan Greenspan -- interest rate in the U.S. come up --

MS. BRAINARD: I don't think I want to get into a detailed discussion about whether or not interest rates were discussed.

Q Was there any discussion on Japan's public debt?

MS. BRAINARD: There was some discussion about trends in the Japanese economy more generally. I don't recall any discussion of Japanese public debt in particular.

Q Lael, can you explain the program that the White House I guess announced earlier this week on extending a billion dollars worth of loans to Africa for AIDS? Because it seems to be in conflict with the notion of trying to reduce the debt of poor countries.

MS. BRAINARD: I cannot give you a lot of details on that. I believe Jim Harmon held a press conference on that earlier this week. It's an Ex-Im program, and I believe the intent is actually to roll it out on a pilot basis to begin with, to see in fact whether it does address some of the accessibility and affordability problems that developing countries have encountered in getting access to HIV-AIDS drugs and treatments more generally. And my understanding of the way it would operate is that it would be rolled out and scaled up, if in fact it did turn out to enhance accessibility and affordability.

Q But how -- isn't it inconsistent with the notion of trying to reduce poorer countries' debt, to be extending them great new loans?

MS. BRAINARD: I believe that the intent is to roll it out in a way that on balance actually expands a country's ability to address its HIV-AIDS crisis.

Q Did Japan, did Mr. Mori make any specific comments or promises to other G-7 nations regarding policies to ensure economic recovery?

MS. BRAINARD: I'm having a hard time hearing you.

Q Did Prime Minister Mori make any specific promises regarding Japanese policies to ensure recovery?

MS. BRAINARD: Well, again, I don't want to get into specific leaders' remarks, but I will say generally that there was a discussion about some of the measures that Japan has been taking to sustain momentum on recovery.

Q Going back to debt relief, you said the leaders said it was a real sense that this was a very high priority. What exact steps do we expect to come out of this summit in terms of moving forward towards debt relief? And how do you respond to critics who say the leaders are doing a lot of talking, but they're not taking steps to get more debt relief?

MS. BRAINARD: I think coming out of the summit there will be intensified work on the part of finance ministries, as well as on the part of others in the government that have close relationships with some of the debtor economies, to try to figure out, in very particular instances, what things need to be done to move the countries to decision points quicker -- and similarly intensified engagement with the IMF, with the World Bank, so that we're all working together to the same goal.

MR. SIEWERT: One more, and then Lael has to get back.

Q Just a follow-up, to critics who say that they're just not moving fast enough?

MS. BRAINARD: Yes, I think on the issue of the pace of implementation, there is a general feeling that it would be desirable to get more countries qualified, but within the existing framework -- within the framework of laying out poverty reduction strategies -- again, so that the resources are used to really address education, infectious diseases -- key development priorities.

MR. SIEWERT: One more.

Q Would you say there is any criticism implicit of the IMF and World Bank in what you've just said, in the sense that they haven't been working together as well as they might have?

MS. BRAINARD: I don't believe there was any sense of criticism whatsoever. I think it was a feeling that we all need to work together, that we all share the same goals.

Q Thank you.

MR. SIEWERT: Thank you.

END 7:08 P.M.

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