French Finance Minister Edouard Balladur said the Group of Seven major industrial nations G-7 can achieve stable currency values by adhering to accords reached this year in Paris and Washington. Balladur asked at a news conference if coordinated market intervention by central banks was sufficient to halt the dollars recent slide said each country has to fulfill commitments outlined in the G-7 accords. Earlier this month in Washington finance ministers of the U.S. Japan West Germany France Italy Britain and Canada reaffirmed an earlier Paris accord to arrest the dollars fall. Balladur said the current nervousness in foreign exchange markets can be partly attributed to some operators in the market only watching short term economic indicators. You have to keep a cool head he said declining to elaborate further. In an earlier speech before the Milan Chamber of Commerce the minister said European countries have to seek a better consensus of economic and monetary policies. On the European Monetary System he said The persistent vulnerability of the foreign currency mechanism particularly to the movements of the dollar can be explained by the absence of a common policy for currencies of other countries. Balladur said I am profoundly convinced that the European countries have to define together this position with respect to the dollar and the yen. He said Italy eventually would have to abandon its higher margin of fluctuation within the European Montetary System. I hope that the spectacular improvement of the economic situation and of the balance of payments will permit (Italy) to do it soon. The lira is currently allowed a fluctuation margin either side of its agreed midpoints with other EMS currencies of six pct against 2.25 pct permitted for the other members.
BALLADUR URGES ADHERENCE TO G-7 CURRENCY ACCORDS