	lawson says louvre currency accord satisfactory the louvre agreement by the group of seven finance ministers and central bankers to stabilise currencies has worked well and needs no fundamental strengthening at the economic summit in venice on june u k chancellor of the exchequer nigel lawson said previewing the summit which he expected would not produce any major new economic initiatives lawson told reporters work remained to be done on improving the conditions for lasting world economic growth side measures to boost growth he said i think it is possible that there may be scope for a further reduction in interest rates in germany he added but stressed that he had had no indication that such a move was likely he made no mention of japanese interest rates lawson said the u s should embark on a gradual reduction of its fiscal deficits over the next two or three years he said the february louvre accord had produced satisfactory exchange rate stability in part thanks to heavy coordinated intervention of group of seven central banks and he was content with sterling s exchange rate pointing to the record billion stg rise in u k may currency reserves announced today he said we have been playing a very full part ourselves we have been intervening to a very much greater extent than we had done hitherto lawson said there was a risk that the louvre agreement may falter if member states did not implement the macro economic commitments underlying the accord certainly it would be more difficult to maintain exchange rate stability if countries are seen not to implement their commitments in paris in this respect he said the u s budget deficit was very important noting the billion yen economic package announced by japanese prime minister yasuhiro nakasone last week lawson said what is really needed in japan is an increase in merchandise imports supply side measures are critical there is a specific range of consumer and agricultural goods where they have an extremely restrictive regime which is wholly unjustified he said lawson doubted that tokyo s partners would indulge in japan bashing at the summit especially after the economic stimulation package and the announcement of nakasone s plans to increase japanese development aid over the next three years japan s more flexible stance on tokyo stock exchange membership would also help deflect criticism he said he said he thought west germany would instead come under pressure at the summit to adopt similar stimulation measures to jack up faltering economic growth in this respect lawson said he hoped bonn would bring forward to january part of its agreed package of tax cuts scheduled for he also called on bonn to push ahead with the privatisation of german national industries on debt lawson said he expected a three point british plan to alleviate the burden of the poorest sub saharan countries to make progress in venice the plan involving concessional rescheduling of sovereign debt in the paris club was first proposed at the imf and world bank meetings in washington earlier this year lawson said he would seek to consolidate political backing for the plan at the venice summit and hoped the programme would be finalised at the autumn meetings of the imf and world bank he welcomed the recent moves by citicorp and chase manhattan to increase sharply their third world debt provisions first it is a blow for realism second because the market response has shown that banks have much less to fear from this sort of move than they felt before citicorp he said u k banks should follow bank of england recommendations strengthening their balance sheets and making more provisions they have done it to some extent they need to do it more lawson said adding it was up to the banks themselves to determine the appropriate size of provisions he also said the dismantling of farm subsidies would be discussed at the summit there is a consensus which we have to push further reuter 
