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Germany wants G20 to accept G7 currency statement
February 13, 2013 / 1:08 PM / 5 years ago

Germany wants G20 to accept G7 currency statement

BERLIN (Reuters) - The Group of 20 industrialised nations should endorse market and not politically driven exchange rates in line with the position held by its G7 members, a German government official said on Wednesday.

The Group of Seven powers said on Tuesday fiscal and monetary policies would not be directed at devaluing currencies, a statement meant to soothe nerves that Japan was aiming to guide the yen lower with aggressive expansion of monetary policy.

“I‘m very glad that we have hopefully concluded the question of exchange rates for now and preliminarily with a new G7 statement ... which all G7 members accepted and I hope the G20 will also accept,” the official told reporters.

G20 finance ministers and central bankers meet in Moscow on Friday and Saturday and sources said it was unclear whether they would issue a fresh statement on currencies, refer to their November 2012 statement or simply mention foreign exchange in their final communiqué.

France has called for coordinated action to counter the euro’s strength and avoid damaging an economic recovery, but got a cool response, with policymakers stressing instead that countries should focus on boosting their competitiveness.

“Exchange rate discussions must not lead to states neglecting structural reforms. We will continue to urge to see more structural reforms in the euro zone, in Europe and on a global basis,” the official said, speaking on condition of anonymity.


The G7 statement was muddled on Tuesday by contradictory comments about whether it gave Tokyo a free pass to pursue policies that weaken the yen. One source said that was due to irritation with Tokyo for rushing out its own interpretation.

The German official said Finance Minister Wolfgang Schaeuble would also push for a follow-up framework to the Toronto goals of halving public deficits by 2013 and stabilising debt levels by 2016 even though some members would not fulfil the 2013 goal.

“We believe strongly ... that from a certain level of debt, there can be no new growth as then there is no trust that states can pay back their debt. So it’s right that we start discussions on what comes after Toronto,” the German official said.

Germany also wanted discussion on introducing medium-term targets for G20 nations, such as balanced budgets by 2020.

Berlin is hoping it will get support on these goals from Russia, which holds the G20 presidency and may want to leave a mark with Toronto II goals or St. Petersburg goals, named after the location of the G20 summit in September.

Other topics where Germany hoped for progress included an international introduction of collective action clauses on sovereign debt and financial market regulation.

“Financial market regulation is not concluded,” the official said. “The minister has said on several occasions that he is not content with all developments.”

Unsatisfied with the speed of international implementation, Germany has pushed ahead with its own plans to reform its banking system, even though the country may need to adjust once the European Union follows suit.

Editing by Mike Peacock

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