THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release July 9, 1994
SECRETARY OF THE TREASURY LLOYD BENTSEN
AND SECRETARY OF STATE WARREN CHRISTOPHER
7:10 P.M. (L)
SECRETARY BENTSEN: Creating jobs. That's been one
of our major objectives here. And I've certainly heard some good
reports thus far. They're talking about the G-7 having a 2.5
percent growth in its GDP. That's sure a lot better than the one
percent that we saw last year.
In some places that means getting into business for
yourself. We're seeing that happen in Russia. We're seeing the
privatization of some 70,000 firms. I never thought I'd see the
day when approximately half of the GDP in Russia would be coming
from private sources.
At this summit, it would certainly help to have the
American economy in good shape. I didn't feel the kind of peer
pressure I felt at my first G-7 meeting in London when they said,
now, don't be telling us what to do about our economy until you
get your own economy in shape.
To all of them, we could point out what we are doing
about our budget deficit. We came to Italy as the Ferrari of the
economies -- the fastest-growing one, the one that makes up some
40 percent of the GDP, but insofar as growth has three-quarters
of it. It won't be that way long. That doesn't mean that ours
is slowing down, but it means that theirs is catching up.
Today, we have reaffirmed our strategy for growth,
and we've done it because it's working. The U.S. is going to
keep cutting that budget deficit. And for Europe to reduce its
deficit so it can create the conditions for lower interest rates
and for Japan to stimulate its economy. Nothing encouraged me
more than the statement by Mr. Takemuri to tell us that Japan is
going to extend its cut on the income tax until they're assured
that the economy is recovering well.
I thought our discussion on jobs was also useful.
The President put this one on the table, and I think the
Europeans are glad he has.
On trade, the top priority was to complete the
Uruguay Round of GATT. I told my friends that I felt that the
Congress would ratify it this year. And as soon as I return to
Washington that's what I'll be working to try to accomplish.
On Russia, I'm impressed with what they're
achieving. I look at that inflation. It took the G-7 countries
five years to lower the annual inflation rate from 4.4 percent
to 2.3 percent. And that was a tremendous accomplishment. It's
now the lowest that it's been in decades.
But the Russians have lowered their inflation from
20 percent per month -- that's what it was last year -- to under
5 percent last month. They agreed to expand the amount of
support -- support that Russians will get as they proceed along
the reform path, that will help them. There is also new support
to help other transforming economies now in the exchange markets.
Let me give you a sense of the discussion amongst
the finance ministers. We agreed that the underlying economic
fundamentals are sound, and that the conditions for an enduring
recovery with low inflation are now in place in each of our
countries. We're all concerned. We agreed that recent movements
in exchange rates are not in line with the basic conditions
prevailing in our economies. And thus, as I've been saying, a
stronger dollar would be desirable.
We look forward to increasing cooperation, and the
one thing I don't telegraph is our future actions. But we're
prepared to act when it's appropriate. We agreed to enhance the
policy of coordination of the process. You'll likely see more
frequent meetings with our central bank colleagues to develop the
responses to potential threats to recovery. It'll also involve
more cooperation among regulatory authorities to preserve the
stability and the soundness of global financial markets.
Now let me end with this. I want to credit
President Clinton for making the G-7 a more user-friendly group.
We may be meeting in formal settings, but I am starting to see a
more general discussion and more give-and-take and a more
He did something else at this summit. Fifty years
ago our leaders put in place institutions that contributed to a
remarkable period of growth. And at this summit the President
began the process of creating an architecture for the next 50
years, which Secretary Christopher will tell you more about now.
Now let me introduce you to a very good and a very
able friend with a tough job, Secretary Christopher.
SECRETARY CHRISTOPHER: Thanks, Secretary Bentsen.
I really want to say at the outset how much our whole delegation
has benefitted from the wise leadership and sound counsel that
Lloyd Bentsen always gives in this kind of a situation. The
leaders today made a number of important decisions, a number of
things that would have a major impact on the world, the United
States for years to come, but I particularly want to highlight
one aspect of President Clinton's vision of leadership. Through
his personal efforts, the leaders of the G-7 have agreed to take
on one of the most important responsibilities that there is, and
that is adapting and renewing the institutions we have to the new
period ahead, to the 21st century. This will be at the center of
the agenda in Halifax. This was a very distinctive contribution
of President Clinton -- both the ideas and the words.
As you know, from the beginning of his presidency,
President Clinton has led the way to integrate the new market
democracies of Central and Eastern Europe and of the New
Independent States -- integrate those into the structures and
institutions of the West.
The trip we're taking has highlighted those
priorities and also indicated the major strides that have already
been made in this regard. In Riga and Warsaw, the President
provided new support and assistance to the countries of Central
and Eastern Europe in their difficult transformation in an
economic and political sense.
Tomorrow we will continue our efforts to support
reform and renewal in Russia. We'll end this trip by the
President's speech at Brandenburg Gate, a very vivid symbol of
overcoming the divisions of Europe.
I want to call your attention to a few of the
achievements of this summit that are particularly relevant to our
foreign policy. We've reaffirmed our commitment to integrate
Russia and the States of Central and Eastern Europe, to the
Western political and economic structures. We've renewed and
affirmed our commitment to ratify GATT this year. We've
recognized the importance of Ukraine's political and economic
transformation into the future, into a fully integrated Europe.
We've taken particular steps to assist in Ukraine's energy needs
and to the closing of the Chernobyl reactor.
Finally, in preparing for President Yeltsin's
historic participation in tomorrow's discussions, we have
endorsed the efforts begun last year at Tokyo to encourage the
remarkable economic transformation of Russia. My own
participation in this summit has concentrated on the discussions
between the leaders on political issues. This will be the focus
of tomorrow's meeting when we'll be joined, of course, by
President Yeltsin and Foreign Ministry Kozyrev.
We'll cover a number of topics on the world's
political agenda -- NATO and the Partnership for Peace, North
Korea, Nonproliferation, Bosnia, Haiti, Algeria -- the whole
compendium of important issues.
From our discussions at the ministerial level thus
far, I can tell you there's a high degree of convergence between
the nations of the G-7 on these subjects. I look forward to
further discussions and will be reporting to you further tomorrow
on these subjects.
Thank you very much.
Q Mr. Secretary, can I ask you a question about
Korea, if you would? Apparently there will be no funeral
delegations which normally would be a way to reaffirm past
positions. Will the U.S. make some move to try to reaffirm the
commitment you have to a nuclear freeze and to a full inspection?
And beyond the nuclear issue, this is a vacuum of sorts that is
open now. What does the U.S. propose to do or how will you try
to reinforce the allies and allay any anxieties?
SECRETARY CHRISTOPHER: Any change in leadership in
a country as remote as North Korea on any change that comes
suddenly clearly deserves very careful watching, and we'll be
watching this situation with great care over the next several
days and weeks. The President said we know relatively little at
the present time. I began to discuss this matter around 6:00
a.m. this morning when Foreign Minister Han of South Korea --
Republic of Korea -- called and we discussed the developments and
what it might mean for the future of the discussions. And the
day has been marked by a number of consultations on that subject.
What we know is that in Geneva -- although today's
meetings were set aside -- the delegation from North Korea,
headed by Vice Premier Kong, a high-ranking North Korean, has
asked that our delegation standby to resume the discussions when
he receives further instructions, and I think that's a somewhat
We have seen press reports that the North Koreans
want to maintain the schedule with respect to the summit meetings
between North and South Korea. But we are in a period in which I
think the situation deserves very careful watching, we intend to
do that. Of course, we'll try to confirm the nuclear freeze.
Probably the soundest way to do that is in Geneva. But we will
be trying to use this period as effectively as we can to keep
moving in a positive direction with North Korea, not to lose the
momentum that seemed to be created by the announcements of the
North/South talks and the beginning of the talks in Geneva.
Q Secretary Christopher, did we have any sense of
who is in charge now and whether the successor will likely be his
SECRETARY CHRISTOPHER: The preliminary signs that
we have there is that Kim Jung Il is head of the funeral planning
party in North Korea. That's some sign of a continuity of
leadership there. There are some other signs that it may devolve
upon him, but frankly, it is too early for us to have any
definitive judgments about this. And once again, I put this
under the category of a situation because of the remoteness to
the country, because of the suddenness of the change in
leadership it bears very careful watching and comparing notes
with countries in the region who might have good sources on that
Q Is it your sense, Mr. Secretary, that the
summit between North and South Korea will take place as
originally scheduled later this month, or are there indications
already that that is going to be delayed?
SECRETARY CHRISTOPHER: Well, my only information on
this subject comes from press reports that I saw earlier today
that the North Koreans want to keep that on calendar. But I
think we need to await official word as to this before we can
There was a question for Secretary Bentsen.
Q Secretary Bentsen, you said you don't telegraph
your future actions, but were you hinting in some way that you
will move on the dollar?
SECRETARY BENTSEN: That would be telegraphing.
Q And were you disturbed by the 20-point plunge?
SECRETARY BENTSEN: Well, we still believe in a
strong dollar, and we still think we have strong economic
fundamentals. And we share with the Federal Reserve the
objective of continued growth with low inflation; and no, I will
not telegraph what we might do.
Q To follow up that point, yesterday you
mentioned that you would not be surprised if the G-7 were to
include some mention in the accord about the desirability of
stable exchange rates that reflect economic fundamentals. We did
not see that sort of a sentence in the communique. Were you
disappointed that that wasn't put in?
SECRETARY BENTSEN: No, I wasn't disappointed on
that. We discussed the issue, particularly amongst the finance
ministers. And we shared the objective of a strong dollar.
Q Why didn't you --
SECRETARY BENTSEN: And we agreed the fact -- well,
I'm telling you now, and you've heard that repeated by other
members of the G-7, and particularly finance ministers who have a
responsibility in that regard.
Q But why not put it on paper? I mean, what was
the problem of putting it on paper?
SECRETARY BENTSEN: You put it on for me, I just
gave it to you.
Q I wanted to ask Secretary Christopher -- you
mentioned a whole list of subjects which -- political discussions
on NATO and the PFP. Does the U.S. have specific goals that you
could share with us on those issues, or are you just going to
have a generalized discussions? Are there any specifics that
you're looking for?
SECRETARY CHRISTOPHER: No, on almost every issue,
we will have a specific goal. For instance, I mentioned Bosnia.
I think the United States hopes to come out of this summit
meeting -- and I am confident that we will -- with a strong
endorsement of the put forward by, first the Contact Group, and
then the ministerial meeting in Geneva last year. And on each of
the subjects I discussed, we have a particular goal or a
particular language we want to achieve in the summit communique.
These communiques have significance for the parties involved.
They have significance because they commit the G-7 countries to
particular forms of action.
Q Will there be any specific goal stated on
SECRETARY CHRISTOPHER: I don't want to foreshadow.
I certainly could not tell you exactly what the leaders will do.
But with respect to Haiti, I would expect -- and quite
confidently, once again, here -- that the leaders would denounce
the illegal government of Haiti and call for the restoration of
democracy in that country.
Q Secretary Bentsen, following up on your earlier
comments about the Federal Reserve, there seemed to be some
indications from you and others yesterday that you were reverting
slightly to the tone you were using late last year when you were
suggesting that it was inappropriate for the Federal Reserve to
tighten credit further. Correct me if I'm wrong, but do you
still have quite the same relationship with the Fed? Has there
been any change in that relationship?
SECRETARY BENTSEN: I think we have a very good
communication with the Federal Reserve. And I did not try to
anticipate their actions, or comment on their actions. I respect
the independence of the Federal Reserve.
Q Secretary Christopher, there's been a lot of
talk here by the President and yourselves about transforming the
institutions of Bretton Woods and the post-war institutions into
new ones for the post-Cold War world. The first attempt here,
with the Trade 2000, has gotten off to a rather halting start, to
say the least. I wonder if you'd talk a little bit -- if we are
present at the creation, now, of something new, why is it much
more difficult for both of you to forge these kind of new
institutions in this world, compared to the one of the post-World
SECRETARY CHRISTOPHER: I'll talk about the
political institutions, and ask Lloyd to talk about the economic
I think we're making excellent progress in
developing new institutions for this post-Cold War period. The
Partnership For Peace has been a remarkable success with 21
nations now signed up for it. I think that's the way to renew
and modernize NATO. And in another continent, the development of
APEC into a much more vital institution with the first-time
leaders meeting in Seattle is another adaptation of an early
institution to the post-Cold War period.
In the Americas the summit meeting, the first one in
two or three decades, I think, gives an opportunity to forge
there a new set of institutions for the 21st Century.
So, all across the globe we are developing new
institutions. It is more difficult in a sense than it was
earlier because we do not have the congealing effect of the need
to contain or combat communism. But I think that we are
addressing this new set of institutions and comparing them
against the problems that we will face in the 21st Century, and
they may be quite a different set of problems. Problems like
crime, narcotics, environment, population, nonproliferation.
Those global issues need a new set of institutions and, so, we'll
be developing new institutions and modernizing old institutions.
Even the United Nations deserves a very hard look to see how that
can become a more effective institution.
Perhaps Lloyd would be good enough to talk about the
SECRETARY BENTSEN: I might speak on the economic
side of it. And what you're seeing is these institutions in
partial transition and a continuation of that. Let me give you
an example of that when we're talking about the IMF.
As I recall, the IMF has around $30 billion in loans
and around $40 billion in assets. There's room for further
expansion in assistance. And you're seeing that in the SDRs that
will be issued. You're seeing that for all of the new member
countries. You'll see that for all of the states of the former
Soviet Union, and you'll see it for economies that are in
transition, too, an expansion of that kind of assistance. And in
looking at the World Bank, you will be seeing further
consideration of things like the environment, like the poor, and
it will not just be for structures or projects at that regard.
So, an expansion of the types of loans that they're making.
SECRETARY CHRISTOPHER: I understand I'm keeping you
all from Italian soccer. Under these lights here I feel like I'm
playing myself. (Laughter.)
Q Secretary Bentsen, can you clarify the dollar
situation one more time, please? The President seemed to throw
cold water on the idea of intervention on Friday, talking about
the dollar exchange rates in relation to economic fundamentals,
but today you're saying we're prepared to act when it's
Can you, without telegraphing your plans, rule out
any further intervention or higher interest rates?
SECRETARY BENTSEN: No, that would be telegraphing.
No. That would be telegraphing. And I get back to the very
basics I've told you. And, again, we believe in a strong dollar
and we think that the underlying economic fundamentals of the
country are excellent and we share the objective with the Federal
Reserve of continued growth, low inflation, and I will not
telegraph my intentions.
THE PRESS: Thank you. 7:35 P.M.
END7:35 P.M. (L)