15 February 2001, 18:16 IMF KOEHLER:G7 SHOULDN'T HECTOR JAPAN ON RIGHT POLICIES
ROME (MktNews) - Past experience has shown that the usual approach
of the G-7 group of leading industrialized nations in making policy
recommendations to Japan is not very effective and that a new strategy
would be advisable, IMF Managing Director Horst Koehler reportedly told
Thursday's edition of an Italian newspaper.
The interview, in Il Sole 24 Ore, contained few direct quotes, but
Koehler was paraphrased as saying that too much pressure and too much
advice from Japan's G-7 partners should be avoided.
Such an approach "has a limited effect," Koehler was quoted as
saying, and a more subtle, less hectoring approach should be considered.
Koehler was speaking ahead of Saturday's G-7 meeting in Palermo,
Italy.
Koehler also said Japan should not be encouraged to adopt new
fiscal stimuli because of their negative impact on public finances. On
the other hand, he identified room for maneuver in monetary policy and
suggested that if economic indicators deteriorated further, Japan should
consider "non-conventional measures to bring liquidity to the system."
He did not elaborate on these.
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