FROM THE OFFICE OF PUBLIC AFFAIRS

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

First, I would like to say that it was a very interesting and, I believe, valuable meeting. This is really a unique forum where Finance Ministers and Governors can get together on a regular, and rather informal, basis and talk through together the key issues and challenges that we face.

We focused on three main topics in today's meeting: first, the outlook for growth in our own economies, and in the world economy more generally; second, the key issue of global financial architecture; and third, the very difficult situation in Kosovo and its ramifications for neighboring countries. We also discussed Russia.

On the first, we all agreed that while there have been some improvements in recent months--reflecting both signs of better performance in some emerging market economies and policy responses in G-7 countries-- most areas of the global economy are experiencing low or negative growth, so serious challenges lie ahead, that will take some time to resolve. The most important contribution that we in the G-7 can make to improving the overall global outlook will be to promote sustainable domestic growth in our own economies, bearing in mind the favorable outlook for price stability in our countries. As far as the United States is concerned, prospects are favorable for another year of strong economic activity. But it is very important that Europe and Japan also get on track for solid and balanced growth.

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 promote sound economic fundamentals and more balanced growth among key economies and thereby help avoid excess volatility and significant misalignments of exchange rates of major economies. We will continue to monitor developments in exchange markets and cooperate as appropriate."

As far as emerging market countries are concerned, we welcomed the return of more stable conditions and early signs of recovery in Asia -- particularly where the commitment to economic reform is strong. We noted that serious challenges remain both in those countries that have made progress, and elsewhere.

Second, we discussed at length the reform of the international financial architecture. This is an issue that has been under consideration for some time in a variety of fora. As I indicated in my speech on this topic last week, reform in this area will not involve a single dramatic announcement but a collection of actions over time, some of which have already been taken.

This afternoon, we had a good discussion in some of the key areas going forward -- the role of the private sector, exchange rate regimes and capital flows -- in each of which there have been practical actions, even as the work proceeds. We will continue to work intensively on this agenda as we move toward the Leaders' meeting in Cologne.

Third, on Kosovo, we agreed that the international community must help affected neighboring countries to address the damage done to their economies by this enormous human tragedy and to sustain economic reform efforts which are vital to their long-term economic prospects. The IFIs have a critical role to play in this process.

We also reiterated the importance of strengthening the HIPC debt initiative. We reviewed the proposals made by a number of G-7 countries with a view to reaching consensus by the Cologne summit in June. We also discussed the Y2K issue, where we agreed that each G-7 country should prepare a short statement for the Leaders' summit in June on the status of arrangements in its critical sectors. Finally, we met with our Russian colleagues and urged them to take all necessary steps to reach agreement with the IMF on a credible economic program.