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Summit Contents

The following document is an unofficial version of the Draft Statement By G7 Heads of State and Government. The G8 Research Group has judged it to be authentic and of value to those exploring the way G7 consensus emerges from the preparatory through the leaders' summit stages. It is has thus been published here at the same time as the official release of the final document for this educational purpose. The publication of this document is the sole responsibility of the G8 Research Group.

Draft Statement By G7 Heads of State and Government

26/04/98 10.24
Lancaster House: Final

The Heads of State and Government of the G7 countries and the President of the European Commission met today, 15 May, to discuss the world economic and financial situation, and the challenges we face in strengthening the global financial system.

The World Economy

2. We discussed recent developments in our own economies and economic developments in the rest of the world. In our own economies we will work together to achieve sustained non-inflationary growth. Such growth and stability is more important than ever, not only for our own economies, but also for other economies in the world, particularly the recovering economies in Asia.

3. We also agreed that the challenges facing each of our own economies remain different:

4. We welcome the decisions taken on the [2 May] on the establishment of Europeand Economic and Monetary Union. We look forward to a successful EMU which contributes to the stability of the international monetary system. The commitment in European Union countries to sound fiscal policies and continuing structural reform is key to the long term success of EMU, and to improving the prospects for growth and employment.

5. We recognise that all countries in the world have an interest in growth and stability in our countries. Equally we have an interest in sustained growth and stability in their economies. We are encouraged by the recent progress in restoring confidence in emerging markets that have been affected by the crisis. We welcome the contribution made to global stability by the pursuit of sound economic and financial policies. In particular prompt action by some emerging and transition countries to strengthen their economic policies has helped avoid spillover effects. Sound macroeconomic policies, open markers and continued structural reform in all countries are essential for long term stability in the world. Recent experience emphasises the importance also of good public governance.

Strengthening the Global Financial System

6. Globalisation has the power to bring immense economic benefits to all countries and people. But the Asian financial crisis has revealed that there are potential weaknesses and vulnerabilities in the global financial system. In particular we are conscious of the serious human and social consequences of such crises when they occur. We therefore see an urgent need to take steps to strengthen the global financial architecture, to reduce the risks of such crises recurring in future and to produce a system that is more robust to shocks when they occur.

7. Previous summits have also dealt with ways of strengthening the global financial system, and this should be seen as a continuing process of reform. It is essential for individual countries to pursue sound economic policies, open markets and good governance, if stability is to be achieved. At the same time we confirm the central role we see for the IFI's in promoting these good policies, in helping to prevent failures in future and in responding when crises occur. Their response has been crucial in overcoming recent problems and we must find ways to strengthen their role in future and in responding when crises occur. Their response has been crucial in overcoming recent problems and we must find ways to strength their role in the future.

8. We welcome and endorse the report by our Finance Ministers on ways to strengthen the global financial architecture. Of their ideas, we attach particular importance to the following: