Italy’s Boycott of Dollar Talks Called Part of European Struggle

Italy’s boycott of last weekend’s dollar stabilization talks is part of an internal European struggle for political influence, officials said Tuesday.

Britain and France are worried that Italy’s effort to win more power in international economic affairs could diminish their own role in participating in decision-making along with West Germany, Japan and the United States.

As the so-called Group of Five, or G-5, finance ministers and central bankers from the five largest industrial democracies meet periodically to bolster international economic cooperation. In September, 1985, when the G-5 agreed at New York’s Plaza hotel on measures to help drive down the value of the dollar, Italy and Canada objected that they were being excluded from an important decision-making forum.

Refused to Disband G-5

Last May, at the Tokyo economic summit, the G-5 agreed to include Italy and Canada in a broader Group of 7 of all the summit nations, but they refused to disband the influential G-5 framework.

“Italy and Canada want to see the G-7 as the key institution in international monetary affairs,” said Fred Bergsten, president of the Institute for International Economics in Washington, “but France and Britain are worried that they would end up with a ‘G-3’ making all the key decisions. That’s why they don’t want to expand the club.”

West Germany, Japan and the United States might be tempted to work out their differences privately, he explained, bypassing the other major countries if the formal decision-making institutions become too unwieldy.

These rivalries came to a head at the currency talks last weekend, when Italy refused to attend a formal G-7 session on Sunday after G-5 officials met privately Saturday and conducted a working dinner that night.

Italian Treasury Minister Giovanni Goria issued a statement that he was boycotting the meeting because Italy would play only a superfluous role in the negotiations. Other officials said Goria’s move came only after he had talked with aides to Prime Minister Bettino Craxi.

Apparent Acceptance

Initially, Goria appeared to accept the explanation that the G-5 nations were not meeting formally Saturday and implied that he would participate in Sunday’s meeting, as Canada did.

But Craxi, officials said, is under domestic political pressure to assert a stronger profile before a planned transfer of power next month within Rome’s coalition government to a prime minister from the rival Christian Democrats.

Through aides, Craxi, a Socialist, threatened to call off the annual G-7 economic summit, scheduled for Venice in June.

But other Italian officials played down the threat. Craxi’s chief rival, Foreign Minister Giulio Andreotti, told reporters in Brussels that Italy still plans to play host to the summit. Andreotti, a Christian Democrat who is likely to become prime minister if next month’s transfer actually takes place, said Italy would not “interrupt the tradition of the G-7.”

In Italy, government officials said they believe that France and Britain were behind the decision not to allow Italy to discuss the new agreement. These officials said French representatives did not view Italy as an important enough economic power, while the British were concerned that Italy might be seeking to replace it in the G-5. Italy’s economy has been booming, putting the country on the verge of overtaking Britain as the fifth-richest industrialized democracy.

French authorities are believed to be concerned enough at the reported Italian view of relations between the two countries that President Francois Mitterrand is making an unscheduled visit to Rome today to meet Craxi and to soothe hurt feelings.

Under current exchange rates, Italy’s per-capita economic output passed that of Britain last year, according to estimates by the Organization for Economic Cooperation and Development.