Let me start by thanking Oskar Lafontaine and Hans Tietmeyer for hosting today's extremely interesting meeting of G-7 Finance Ministers and Governors.

I would like just to say a few words about the meeting, and then I will be happy to respond to questions.

First, I would like to say how very valuable I believe it is for us to get together and really talk through the common issues and challenges facing us in today's global economy. This has been especially true during the past eighteen months or so, as we have addressed the issues arising out of the financial crisis in some emerging market economies.

We focused on two main topics in today's meeting: first, the outlook for growth in our own economies, and in the world economy more generally, and second, the key issue of global financial architecture.

On the first, we all agreed on the importance of strengthening the foundations for sustainable growth. As far as the United States is concerned, the overall outlook for us remains favorable, with solid growth expected again this year. But it is crucially important that Japan and Europe also move forward with domestic demand-led growth in their economies, to achieve more balanced growth among our countries, reduce the large external imbalances and support recovery in emerging market economies.

As always, we discussed exchange rates. Let me read for you the language that summarizes our discussion: "We reaffirmed our view on the importance of pursuing policies to help avoid excess volatility and significant misalignments of exchange rates of major currencies. We will continue to monitor developments in exchange markets and cooperate as appropriate."

As far as emerging market countries are concerned, we welcomed the progress in restoring financial stability and strengthening the basis for growth in many Asian countries. We welcomed the commitment of the Brazilian authorities to a strengthened economic program and urged them to continue their reform efforts.

Our second major focus, reform of the international financial architecture, took up a good part of our discussions. This is an extremely complex issue which will take a very long time to resolve in all its facets. Our approach has been to press forward with concrete steps in line with the framework set out at the end of October by G-7 Leaders. Already an enormous amount of work has been done and I am pleased that we were able to make further progress during today's meeting.

The communique lays out a number of areas of progress. Let me point to four:

• We agreed on a significant strengthening of disclosure through the IMF's Statistical Data Dissemination Standard (SDDS) to give a full picture of countries' foreign exchange reserves -- essential for alerting investors and policy-makers alike as soon as a country's international position begins to deteriorate.
  

• We welcomed the progress being made on developing an enhanced IMF facility aimed at reducing the risk of contagion by providing a contingent line of credit to countries affected by financial contagion. We agreed to work at the IMF to bring this facility on-line as soon as possible.
  

• We agreed to move forward with President Tietmeyer's proposal on convening a Financial Stability Forum, although some of the details still need to be worked out by our G-7 Deputies. We want to use this Forum to improve the cooperation between national and international authorities and relevant international bodies to promote international financial stability.
  

• Fourth, one of the most critical elements for the new architecture will be steps to protect the vulnerable in society and spread the benefits of globalization broadly within our societies and around the world. With this in mind, my G-7 colleagues and I stressed the importance of work on principles of good practice in social policy and agreed to press for these to be brought into operational use as quickly as possible.

Our discussion also highlighted the importance of exploring ways to strengthen the HIPC debt initiative. We hope to reach agreement by the Cologne summit in June on ways to do so.

Finally, we met with our Russian colleagues and stressed the importance of a concerted policy response to avert the risks of accelerating inflation and continued economic decline.