The Group of Seven richest nations needs a "common oil policy," German Finance Minister Hans Eichel said Saturday, ahead of a G7 finance ministers meeting Saturday.
Eichel called for an "intensive" dialogue between producer and consumer countries.
"But I don't want to speculate on the manner in which this dialogue is organized," he said at a news conference on the sidelines of the annual meetings here of the International Monetary Fund and World Bank.
French Prime Minister Lionel Jospin on Wednesday said Finance Minister Laurent Fabius would propose an informal meeting between the G7 and representatives of oil producing nations aimed at improving cooperation before Sunday's summit of the Organization of Oil Exporting Countries in Caracas.
But US officials, reluctant to cede too much influence to the cartel, rejected the idea in favor of each country conducting its own bilateral relations with the oil producer countries.
Eichel said that oil policy would be the central issue on the agenda for Saturday's G7 meeting, which will bring together finance ministers and central bank governors from Britain, Canada, France, Germany, Italy, Japan and the United States.
The finance minister also warned German unions against using higher oil prices as an excuse to seek higher wages or a reduction in energy-related taxes -- a veiled reference to a decision by the French government to cut taxes in response to massive protests against higher oil prices.
"That would be a sign in the wrong direction," he said, and a "serious mistake" that would set back the country to the 1970s inflation triggered by high oil prices.
The only foreseeable remedy is to take measures "when the social consequences become unbearable," he said, referring to measures announced Friday by the German government to compensate for the higher price of fuel.
The new measures by the ruling coalition of Social Democrats and Greens provide a tax allowance for people who travel some distance to work and compensation for the needy affected by the higher oil prices.
The announcement came after days of go-slow protests by drivers in Germany, although the actions were less disruptive than the fuel depot blockades in France or Britain.
On the concerted intervention to support the euro Friday, Eichel said: "The joint G7 action was a good move because it surprised (the markets) and it was well-executed technically."
Asked about the possibility of further buying of euros to rescue the single currency, which has lost more than 25 percent of its value since its January 1999 launch, he replied: "Let's stop talking and speculating" – PRAGUE (AFP)
© 2000 Al Bawaba (www.albawaba.com)
