PERSONAL AND CONFIDENTIAL
Foreign and Commonwealth Office
London SW1A 2AH
НКС 090
1
RECEIVED IN REGIO
- 3 AUG 1987
مسکرتے
13
J A L Morgan Esq CMG Mexico City
DESK OFFICER
INDEX
PA
{Action Taken?
28 July 1987
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PA Ranking
jea Анвенија
معمك
INTERNATIONAL FINANCIAL SCENE
1.
the
I enclose a copy of the latest Bank of England paper international financial scene, as amended after Roger Lavelle's interdepartmental meeting on 22 July.
2. The main focus of our attention since I last wrote has again
-
been on the various initiatives for Sub-Saharan Africa, particularly the Chancellor's, but also Camdessus's to enlarge the IMF Structural Adjustment Facility. Most African posts will have seen reports on two meetings held in Paris to discuss these initiatives: an IMF/IBRD organised meeting on 10 July, and a regular Paris Club session on
on 21 July. In spite of the fairly positive language we succeeded in
succeeded in including in the Venice Summit communique, there is clearly a long way to go before either initiative reaches port. The Summit deadline of end 1987 for a conclusion to discussions is beginning to look too optimistic. Although the Paris Club is now offering rescheduling of up to 20 years for certain countries, there is still strong opposition amongst other G5 countries to the all important proposal of the Chancellor's to cut Paris Club interest rates. I will not labour the arguments here: I enclose a speech by the Chancellor to the All Party Parliamentary Group on Overseas Development on 22 July which contains his reply to the doubters. The initiative now needs a hard political push, and we are using every opportunity to get our message across through the Secretary of State's, the Chancellor's, and the Prime Minister's meetings with their G5 counterparts.
firm
3. At the 10 July meeting, only the French came out with a offer to support Camdessus's initiative, and that heavily conditional. It looks increasingly as though Camdessus will have to accept further sales of IMF gold if he is to reach his target of enlarging the SAF by $8
by $8 billion. The Chancellor is currently considering a Treasury proposal that we
we should support gold sales. The IMF has plenty of it, and a limited sale would not substantively affect either the strength of the IMF's reserves or the world gold price. Both of these initiatives will be brought sharply into focus at the annual meetings of the IMF and IBRD in late September.
PERSONAL AND CONFIDENTIAL