Despite looming clashes over policy on Bosnia-Herzegovina and aid to developing democracies, President Clinton and the heads of six other leading industrial powers struck an accord Thursday on a new effort to avert financial crises like last year's Mexican peso debacle.
The congenial opening of the annual Group of Seven economic summit in this old Atlantic harbor city boded well for the economic agenda confronting the world's richest nations, though little progress was expected on political issues to be tackled toward the end of this three-day session.
Taking a cue from the mercurial weather of mingled fog and sun, the G-7 leaders basked in the momentary warmth of consensus on how to prevent a financial crisis in one country--such as the collapse of the peso--from threatening the stability of the global economy.
Treasury Secretary Robert E. Rubin has been promoting such an effort for most of the past year but the idea gained momentum only after the Mexican crisis almost touched off similar jolts as far away as Argentina and Poland.
"From Mexico, the world learned that these very large global financial markets that are so important to economic development around the world can also . . . create problems," Rubin said before the summit opened.
In their economic communique scheduled to be released today, officials said summit leaders will call for:
* Tougher standards for timely disclosure of complete financial information by governments of developing countries. "This is a primary lesson of the problems that transpired in Mexico earlier this year," Rubin said, acknowledging that the peso's weakness could have been corrected earlier--and less disastrously--if more details had been known.
* Closer monitoring of developing countries' economies by the International Monetary Fund, or IMF.
* A new emergency finance arrangement--a kind of "dollar deployment" agency--to enable the IMF to step in quickly if another Mexico-type crisis occurs.
Clinton Administration officials want to avoid being left holding the bag for future bailouts, as occurred in the Mexico crisis when Washington ended up bankrolling a $20-billion package on its own. "The United States cannot be the lender of last resort to the world," Rubin said. "The multilateral institutions need the capacity to deal with such crises."
The summit communique won't include complete details of the new agency--in part because the G-7 leaders want to talk the idea over with newly rich Asian nations such as Taiwan and Singapore, who could sign up as donors.
A senior U.S. official indicated that the amount needed for the facility to be effective would be at least the $50 billion initially envisioned for Mexico. And that poses a political problem--both in Europe, where some German and British officials worry about the plan, and in the United States.
"There's a political perception problem when you propose more money for the IMF in a year when you're cutting both domestic programs and foreign aid," said Bruce Stokes of the private New York research group Council on Foreign Relations.
The opening day of the summit in this capital of Nova Scotia, one of Canada's economically strapped Maritime provinces, was mostly devoted to pomp and ceremony as Clinton and other leaders touched down at Canadian Forces Base Shearwater for fog-shrouded marches by Royal Canadian Mounted Police in parade dress, then motored their way in security-escorted launches to the summit venue as Scottish bagpipe music wafted across Halifax Harbor.
Clinton met with Japanese Prime Minister Tomiichi Murayama in an attempt to resolve their trade disputes, but a deliberately unstructured working dinner of the leaders of the United States, Britain, France, Germany, Italy, Japan and host Canada was the only event on the agenda involving all full-fledged G-7 states.
Russian President Boris N. Yeltsin arrives today to take part in the political discussions--dubbed by Canadian media as the "P-8." Those talks late today and Saturday are expected to expose rifts running through the rich-nation club no longer united against a common Cold War enemy.
The United States has taken a harsher line than its European allies against Russia's intention to sell nuclear technology to rogue Iran; the Administration has threatened deep cuts in U.S. aid to the fragile democracy taking shape in the former Soviet Union.
The Russians have cast themselves as key players in attempts to resolve the Bosnian crisis, although Yeltsin was not thought to be carrying any new initiatives for easing the confrontation between the Muslim-led government and nationalist Serb rebels or for extracting the harassed U.N. peacekeeping force, of which Russia is a part. Britain and France have proposed a rapid-reaction force to protect U.N. peacekeepers in Bosnia.
On a theme likely to draw support from other G-7 powers, French President Jacques Chirac plans to push for a second international jobs conference like the one Clinton held in Detroit in November. Unemployment is a painful common denominator for G-7 states, particularly for France, where the jobless rate exceeds 12%.