FROM THE OFFICE OF PUBLIC AFFAIRS

This weekend, I will travel to Frankfurt to meet with the G-7 Finance Ministers and the European Commission. This will be my last G-7 meeting as Treasury Secretary. As I have said before, in my view, these meetings provide a very effective opportunity for the finance ministers of a small group of leading economies that occupy a similar position in the global economy to come together in an informal setting to exchange views, to develop common positions, and to prepare the ground for action as needed. I think these meetings are indispensable in providing leadership on the issues of the global economy.

Our task at this meeting will be to prepare for the following weekend's Summit in Cologne. We will focus on three basic areas: continuing the work to reform the international financial architecture for the 21st century; strengthening the global economy and promoting balanced growth; and working to accelerate the provision of relief from ongoing debt problems of the highly indebted poor countries .

World Economy

The first challenge we face is promoting growth and recovery in the global economy. With respect to the industrialized nations, while the most likely scenario for the United States remains solid growth and low inflation, subject to the usual ups and downs and the risks of the global economy, we believe all of the G-7 countries must act to promote solid domestic demand led growth. I am sure we will be discussing how Japan and Europe plan to move forward on growth in their economies. We have begun to see some turnaround in the economic performance of the Asian economies affected by financial crisis, and several of the other countries affected by the crisis, such as Brazil, that have so far taken effective action to limit the potential impact of financial crisis on their own economies. However, these countries still face enormous challenges, which makes it critical that they sustain implementation of their reform agendas.

It is also critically important that Europe and Japan do their part because the international system cannot sustain indefinitely the large imbalances created by the disparities in growth and openness between the U.S. and its major trading partners.

Financial Architecture

The second major issue we will focus on is global financial architecture. Our approach to this work has been based on the fundamental belief that a market-based system provides the best prospect for the global economy, but that crisis prevention and response to crisis need to be substantially improved.

We believe that we can use this weekend's meeting to agree on a package of concrete measures to present to our Leaders that will strengthen this market-based system by meeting these objectives.

Debt

The third key challenge is for the G-7 to find a way to address the continuing problems of high debt burdens in the Highly Indebted Poor Countries (HIPCs) to provide a lasting exit from the debt problems these countries face by promoting the adoption of economic reform policies; freeing up more resources for poverty alleviation, sustainable development and good governance; and establishing an environment that promotes the savings and investment necessary for growth. On March 16, President Clinton called on the international community to pursue a comprehensive approach to debt relief for the HIPCs that would provide more relief, faster, to a broader range of heavily indebted poor countries that have strong reform programs. The President said that, AOur goal is to ensure that no country committed to fundamental reform is left with a debt burden that keeps it from meeting its peoples' basic human needs and spurring growth.@

Other Challenges

We will address two other challenges that are particularly important to U.S. strategic interests.

We plan to meet with our Russian counterparts during the meeting to discuss the new government's plans for economic stabilization and reform. We have an important interest in promoting stability and economic growth in this key nation.

Finally, we will discuss our ongoing efforts concerning the economic consequences of the Kosovo conflict. We have been working closely with our European partners and will use this meeting to help ensure a successful effort in this area.