Cold spring
THE cherry blossoms are out in Washing- ton, to welcome the finance ministers gathering there next weekend, but the financial economic climate is getting col- der. So the stock market thermometers have been telling us. The meeting is of the International Monetary Fund's 'interim committee' — really, its political steering group — with other groups of various sizes taking the chance to trade horses. When they all met six months ago in Berlin they agreed to be hopeful, about third world debt, about the imbalances between the world's biggest economies, and about infla- tion. Now the imbalances look much the same, and as for inflation, the ministers and central bankers are in a dilemma. Even if they have done enough to get on top of inflation, have they done enough to persuade the markets of that? Debt, all agree, has got worse. The US Treasury Secretary Nicholas Brady, in a major shift of policy, now proposes a programme for buying up some of the debt, at a discount to its face value, and giving the IMF resources to do this. All members will have to chip in more, but Japan will want to chip in most, as the price of greater influence. In particular Japan wants the second largest voting share in the IMF — displac- ing Britain, which got it as a founder member and by single-minded financial diplomacy has managed to hang on to it ever since. No wonder Nigel Lawson now takes the hardest line against increasing the IMF's capital. Expect him to trade a mean horse.
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