It is a measure of how benign the world economic outlook is that the main topics on the agenda of the...
The formal statement issued at the end of each G7 meeting is now routinely leaked or, at the least, flagged in advance. This time the issue was the degree of support for the yen. The group insisted the current yen strength was Japan's problem, made no comment on the euro and called on the US to raise domestic savings rates.
That was the official bit. More interesting were the strong undercurrents that occasionally surfaced, such as the anxiety, openly admitted at this level for the first time, at the continuing US bull market. Japanese, French and German central bankers all made it clear they expect the US Federal Reserve to tighten monetary policy sharply. The US stock market has risen 70% since Fed chairman Alan Greenspan first warned investors against "irrational exuberance".
Even US officials appear nervous. US treasury secretary, Larry Summers, struck a slightly defensive note, pointing out early in the meeting that the US had done its bit recently to keep the global economy stable - it was time for some positive engagement from both Europe and Japan. The Fed is expected to raise the Fed funds rate when it meets on 1 February, the day after a meeting of European finance ministers. A rise of at least 25 basis points, and possibly 50, is likely.
The US also came under fire for its ballooning trade deficit, which recorded new highs month after month through 1999, ending November at $26.5bn. Like an irresponsible teenager, the US was urged to save more and spend less on imported fripperies, most of which come from the very nations laying the charges. Point scoring aside, the dollar could come under pressure if the deficit keeps growing.
That would worry the Japanese, already concerned at how the strengthening yen is threatening their fragile domestic recovery. With no sign yet of renewed spending at home, despite continual pump priming of the economy, Japan desperately needs to export. The clamour for verbal intervention from the G7 betrays the fear that it will not work.
The third point of the global triangle, Europe, is enjoying renewed economic growth, relatively low inflation and the benefits of a weak euro for its exporters. But the European single currency has dropped 15% against the dollar in its first year. Having launched at $1.17, parity looms, which is making US exporters nervous.
Stubbornly high unemployment and a reluctance to get to grips with corporate reforms are long-standing European problems. Add the implosion of the Christian Democratic Union in Germany, the core of the new euro economy, and investors can be forgiven a little hesitation.
However, funds are pouring into European markets, despite the doubts. Europe is the best alternative at the moment to the US, and engagement in the market might just keep some of the early and promising corporate reforms on track. For what is now a major market bloc, there are also some exciting and relatively unexplored niches.
Achievements, charity work and other happy snippets
Laughable excuses for persisting
Spent 56 years at Schroders
Warns on profits