Industrial Nations Support $50 Billion in Mexico Aid

The Group of Seven leading industrialized nations Saturday expressed “total satisfaction” with President Clinton’s $50-billion international aid package for Mexico after European critics of the plan were mollified by U.S. officials.

In a joint statement delivered Saturday by Canadian Finance Minister Paul Martin, the seven finance officials meeting here also expressed deep concern about climbing inflation in Russia and Moscow’s struggles in implementing economic reforms.

But the officials from the United States, Canada, France, Britain, Germany, Italy and Japan patted themselves on the back for keeping their own houses in financial order.

In most G-7 nations, Martin said, inflation is low, economic growth is robust and job creation is improving.

Participants in the Toronto meeting, which leads up to a full-scale G-7 summit in Halifax in June, acknowledged that more attention must be devoted to averting the kind of financial crisis now gripping Mexico.

“Mexico must pursue vigorously its new economic programs . . . but we must find ways to solve these problems” in the future, Martin said.

Since Mexican officials moved to devalue the peso on Dec. 20, the currency has lost almost half its value against the U.S. dollar, sharply boosting the price of goods for ordinary Mexicans and threatening the billions of dollars Wall Street has invested in the country in recent years.

“There is no question that every member of G-7 is fully supportive of resolving the Mexican problem” and averting future financial crises, said U.S. Treasury Secretary Robert E. Rubin, who represented the United States at the G-7 meeting.

The G-7 support for the Mexican aid package came after six members of the International Monetary Fund--Germany, Britain, Denmark, the Netherlands, Belgium and Switzerland--abstained Thursday from supporting a $17.8-billion contribution by the IMF.

The six nations complained that they had not been adequately consulted on the loans, which are part of a package of about $50 billion in aid that will be given to Mexico starting Monday.

After the Toronto meeting, Rubin agreed that there had not been sufficient consultation with IMF members but that that was because of the urgency of the crisis in Mexico.

Rubin and Martin said bolstering the economies of the seven leading industrialized nations will ensure a stronger foundation for the global economy and provide more support for the developing world.

With economic success in the G-7, Martin said, “quite clearly we can more easily handle anything (like the Mexico crisis) that might arise in the future.”