Journal Issue

Group of 10 communiqué: Ministers call for fiscal rectitude

International Monetary Fund. External Relations Dept.
Published Date:
October 2003
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The finance ministers and central bank governors of the countries of the Group of 10 (G-10) met in Dubai, United Arab Emirates, on September 21. John Manley, Deputy Prime Minister and Minister of Finance of Canada and current head of the G-10, chaired the meeting. Ministers and governors took note of reports from Sir Andrew Large, Chair of the Deputies of the G-10; John Taylor, Chair of Working Party No. 3 of the Organization for Economic Cooperation and Development; and Malcolm Knight, General Manager of the Bank for International Settlements.

Ministers and governors discussed the general economic climate and key challenges facing the G-10 economies. They welcomed the recent prospects of improvement in the overall economic outlook, including the acceleration of activity in the United States and Japan and the reforms being implemented in Europe. They agreed that supportive macroeconomic policy measures are contributing to a recovery. However, they noted that some risks remain. Ministers and governors discussed the significant internal and external imbalances that persist and that could weigh on the sustainability of the recovery. They underscored the need for fiscal consolidation as the recovery takes hold to cope with the mounting fiscal pressures associated with population aging. They also stressed the need for continued progress on structural reform to raise potential growth, enhance economies’ resilience to possible shocks, and contribute to the unwinding of global imbalances.

Ministers and governors welcomed the increasingly widespread use of collective action clauses in international sovereign bond issues. In this context, they noted the significant role that had been played by the Group of 10 Working Group on Contractual Clauses, via both its report and its consultations with issuers and market participants on the content and impact of collective action clauses. They looked forward to the inclusion of such clauses as a standard feature of bond issues in all major legal jurisdictions as an important element of the debt resolution framework.

Treasury Secretary John Snow of the United States was elected Chair of the Group of 10 for the coming year.

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