TEXT: SECRETARY RUBIN'S STATEMENT ON G-7 MEETING AGENDA
(Says Europe, Japan must end imbalance with U.S.)

Washington -- U.S. Secretary of Treasury Robert Rubin says that European and Japanese governments must do more to stimulate growth in order to reduce the large trade deficit the United States has with its major trading partners.

"The international system cannot sustain indefinitely the large imbalances created by the disparities in growth and openness between the U.S. and its major trading partners," Rubin said in a June 10 statement. He read the statement at the beginning of a briefing ahead of the Group of Seven (G-7) finance ministers' meeting set for June 12 in Frankfurt, Germany. The leaders of the G-7 plus Russia will meet for their annual G-8 summit June 18-20 in Cologne, Germany.

Among the G-7 economies, Rubin said, the "most likely scenario" is for the United States to continue on a path of "solid growth and low inflation, subject to the usual ups and downs and the risks of the global economy." At the G-7 ministers meeting, Rubin predicted, there would be discussion for how "Japan and Europe plan to move forward on growth in their economies."

Rubin cited progress in the recoveries from financial crisis by Brazil and the Asian economies. These countries, however, must sustain the implementation of their reform programs, he said.

At the meeting, the ministers will also continue to review ways to reform the international financial architecture and accelerate programs to provide relief to highly indebted poor countries that have agreed to make reforms, he said.

The finance ministers will also meet with their Russian counterparts to discuss the new government's economic plan, Rubin said. The ministers will also discuss efforts regarding the "economic consequences" of the conflict in Kosovo, he said.

Rubin noted that this would be the last G-7 finance ministers' meeting that he will attend. Rubin has submitted his resignation and is expected to leave his job in July. Deputy Secretary of Treasury Lawrence Summers has been nominated to succeed him.

Following is the text of Rubin's statement as made available on the Treasury Department's web site.

(begin text)

TREASURY SECRETARY ROBERT E. RUBIN
PRE G-7 PRESS CONFERENCE
Washington, DC

This weekend, I will travel to Frankfurt to meet with the G-7 Finance Ministers and the European Commission. This will be my last G-7 meeting as Treasury Secretary. As I have said before, in my view, these meetings provide a very effective opportunity for the finance ministers of a small group of leading economies that occupy a similar position in the global economy to come together in an informal setting to exchange views, to develop common positions, and to prepare the ground for action as needed. I think these meetings are indispensable in providing leadership on the issues of the global economy. Our task at this meeting will be to prepare for the following weekend's Summit in Cologne. We will focus on three basic areas: continuing the work to reform the international financial architecture for the 21st century; strengthening the global economy and promoting balanced growth; and working to accelerate the provision of relief from ongoing debt problems of the highly indebted poor countries.

World Economy

The first challenge we face is promoting growth and recovery in the global economy. With respect to the industrialized nations, while the most likely scenario for the United States remains solid growth and low inflation, subject to the usual ups and downs and the risks of the global economy, we believe all of the G-7 countries must act to promote solid domestic demand led growth. I am sure we will be discussing how Japan and Europe plan to move forward on growth in their economies. We have begun to see some turnaround in the economic performance of the Asian economies affected by financial crisis, and several of the other countries affected by the crisis, such as Brazil, that have so far taken effective action to limit the potential impact of financial crisis on their own economies. However, these countries still face enormous challenges, which makes it critical that they sustain implementation of their reform agendas.

It is also critically important that Europe and Japan do their part because the international system cannot sustain indefinitely the large imbalances created by the disparities in growth and openness between the U.S. and its major trading partners.

Financial Architecture

The second major issue we will focus on is global financial architecture. Our approach to this work has been based on the fundamental belief that a market-based system provides the best prospect for the global economy, but that crisis prevention and response to crisis need to be substantially improved.

We believe that we can use this weekend's meeting to agree on a package of concrete measures to present to our Leaders that will strengthen this market-based system by meeting these objectives.

Debt

The third key challenge is for the G-7 to find a way to address the continuing problems of high debt burdens in the Highly Indebted Poor Countries (HIPCs) to provide a lasting exit from the debt problems these countries face by promoting the adoption of economic reform policies; freeing up more resources for poverty alleviation, sustainable development and good governance; and establishing an environment that promotes the savings and investment necessary for growth. On March 16, President Clinton called on the international community to pursue a comprehensive approach to debt relief for the HIPCs that would provide more relief, faster, to a broader range of heavily indebted poor countries that have strong reform programs. The President said that our goal is to ensure that no country committed to fundamental reform is left with a debt burden that keeps it from meeting its peoples' basic human needs and spurring growth.

Other Challenges

We will address two other challenges that are particularly important to U.S. strategic interests.

We plan to meet with our Russian counterparts during the meeting to discuss the new government's plans for economic stabilization and reform. We have an important interest in promoting stability and economic growth in this key nation. Finally, we will discuss our ongoing efforts concerning the economic consequences of the Kosovo conflict. We have been working closely with our European partners and will use this meeting to help ensure a successful effort in this area.

(end text)

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