Where the G-7 Summit Nations Fail To See Eye-to-Eye : Diplomacy: As their annual meeting opens, the allies are unable to reach a consensus on a long list of economic concerns.

The Americans and Germans are battling over interest rates, Japan is angry at France’s new premier and everybody is fighting over rising trade imbalances.

There could be some fireworks at the annual economic summit of the seven richest industrial nations, which opens today.

Even while they try to forge a common front on aid to the Soviet Union, the Group of Seven has its own problems to sort out.

Some say the heightened economic conflict between the summit partners is a direct result of the end of the Cold War. Without the need to rely on America’s nuclear umbrella, the allies feel freer to speak their minds on economic matters.

“Economic conflict has substantially increased,” said C. Fred Bergsten, head of the Institute for International Economics, a Washington-based research organization. “The old days of feeling the need to settle economic issues in order to keep the military alliance together are gone.”

The allies also have been unable to agree on a coordinated approach to dealing with the most severe world economic slowdown in nearly a decade.

The economies of the United States, Britain and Canada are still officially in recession, and some fear their weakness could escalate into a worldwide slump.

The Bush Administration also differs with its allies on global interest rates. Washington is pushing for cuts, but Germany--worried about the inflationary impact of unification with former East Germany--appears on the verge of raising rates.

Even though other countries have been cool to U.S. pressure, Treasury Secretary Nicholas F. Brady said the Administration had no intention of abandoning its campaign for cheaper credit.

“The emphasis on growth for the world is not some wild, U.S. cowboy idea that growth solves everything,” Brady said at a pre-summit briefing. “If you look back at the problems we faced in the 1980s, economic growth was the best way to increase jobs, investment and economic opportunity for everybody.”

In one sign of cooperation, the United States and its allies launched a coordinated effort in international exchange markets Friday to drive down the value of the high-flying dollar.

The allies previously had been unable to adopt a coordinated approach to taming the dollar, up sharply since February against the German mark and the Japanese yen.

A stronger dollar makes American goods more expensive overseas and threatens to stall the gains in export sales that the Administration is counting on to propel the United States out of recession.

European nations--also faced with trade deficits with Japan and an inability to crack Japan’s home market--have their own list of grievances.

In remarks regarded as highly inflammatory by the Japanese, new French Premier Edith Cresson took office warning of Japan’s economic threat to Europe.

Nowhere is the inability to reach consensus more apparent than in a flagging five-year effort to draft new rules to govern world trade. The free trade talks, known as the Uruguay Round, were supposed to end last December in Brussels.

But the discussions broke off in deadlock when the United States and the European Community were unable to agree on a demand by the United States and Third World countries for sharp curbs in farm subsidies.

Ironically, many economists believe that the Uruguay Round offers the potential of a bigger economic boost to the Soviet Union and its former satellite countries in Eastern Europe by opening Western markets to their goods than from the limited amounts of Western aid they are likely to receive.

The emerging democracies in Eastern Europe would like to sell their farm products in Western Europe but now are unable to do so.

“The Uruguay Round is the first big test of economic cooperation in the post-Cold War world, and we are getting nowhere with it,” said Michael Aho, director of economic studies for the Council on Foreign Relations.