Bonn sees no need to step on the gas
West German Finance Minister Gerhard Stoltenberg has been in the economic hot seat. The United States, some other European nations, the developing countries, even the International Monetary Fund (IMF), would like Bonn to step on the economic gas. But Dr. Stoltenberg has been resisting.
``We see now no additional necessity for further reflation or strong additional incentives,'' the finance minister said in a recent interview here.
Since then Stoltenberg was in Paris for a ministerial meeting of the Organization for Economic Cooperation and Development (OECD), the club of the noncommunist industrial nations. Last weekend that group issued a communiqu'e with a general statement that all governments should take into account favorable trends in the world economy to promote stronger growth over the medium term.
US Treasury Secretary James A. Baker III told the ministers, ``We need stronger European and Japanese growth to help reduce trade and current-account imbalances further.''
The Germans and the Japanese, he noted, have substantial international payments surpluses. As for the US, the weakness in the dollar will help trim its massive trade deficit to perhaps $100 billion in 1987, down from $125 billion this year and $145 billion last year. Mr. Baker went on to say, however, that the 1987 level is ``not politically sustainable.'' Protectionism in the US is not dead, and thus faster growth abroad is needed to slash the trade deficit.
So far, apparently, the Germans are still opposed to taking any immediate measures to stimulate their economy. At the OECD meeting, they frustrated American efforts to draft a communiqu'e with firmer wording about the need for greater growth abroad.
One key test of the German attitude occurs today when the policy-setting board of the Bundesbank, Germany's central bank, meets to consider interest rates.
The US would like it to follow the example of the Federal Reserve and the Bank of Japan, which recently lowered discount rates. If Germany did, it would be a second coordinated drop in rates this year by leading economic powers. But the Bundesbank is likely to leave its rate at 3.5 percent, out of concern over rapid money-supply growth and concern that the mark will strengthen further, hurting German exports.