U.S. Trading Partners Welcome Plan to Cut Deficit

Officials in Japan, West Germany, France and Britain welcomed the new U.S. budget plan Saturday.

Tokyo urged Washington to carry out the measures swiftly and Bonn hailed it as “a good signal” for the restoration of confidence in world financial markets.

President Reagan and congressional leaders, ending monthlong talks that had global markets on edge, on Friday announced the plan to cut the budget deficit by $76 billion over two years.

In Bonn, West German Chancellor Helmut Kohl called the deficit-slashing measures a positive contribution to the stability of global financial markets.

West German Finance Minister Gerhard Stoltenberg called the U.S. plan “effective and credible.”

In France, sources close to Finance Minister Edouard Balladur said the government is “very happy” with the U.S. agreement.

In Tokyo, Japanese Finance Minister Kiichi Miyazawa said he expects the agreement to have a favorable impact on exchange rates and stock market prices, which have undergone large fluctuations.

He said Japan will do its part to help improve its lopsided trade imbalance and world finances by continuing to stimulate its domestic economy and boost imports.

Britain welcomed the budget accord, but said countries with large trade surpluses must respond appropriately.

“As I have all along made plain, this (agreement) is an essential element, both in the correction of the imbalances that have been plaguing the world economy and in the restoration of confidence in the financial markets,” said Britain’s finance minister, Chancellor of the Exchequer Nigel Lawson.

“Other major nations, particularly the (trade) surplus countries, will now need to prepare an appropriate response,” he said.