Figuring out what top financial officials of the developed world mean in their periodic declarations requires talents worthy of the oracle at Delphi. The statements that emerge from their meetings must not only reflect the views of seven economies that are invariably at different points in the economic cycle, but must also reassure markets that there will be no abrupt shifts in policy. The result is a document that tests both patience and the ability to parse the fine points of diplomatic boilerplate.
The statement that emerged from last weekend's meeting of G7 finance ministers was no exception. While most observers would detect little of substance, it offered enough for all participants to claim victory when they address domestic audiences.
The big issue at the meeting was the continuing fall of the dollar against its G7 partners' currencies. The currency has slumped to record lows against the euro, and continues to slide against the yen, despite historic levels of intervention by the Bank of Japan. The yen has reached its highest level in three years, while the dollar has lost a quarter of its value against the euro in the past year, and a third of its value in the past two years. A weaker dollar helps U.S. exporters as it makes their products cheaper in foreign markets. Accordingly, U.S. exports climbed 19.1 percent in the fourth quarter of 2003.