Lafontaine to meet US resistance to plans for future G7 meetings

The German Finance Minister, Mr Oskar Lafontaine, is likely to run up against a wall on his trip to Washington tomorrow as he tries to convince US officials to back a plan giving Europe additional representatives at G7 meetings. The European Union said on Tuesday it wanted institutions, including the European Central Bank and the European Commission, to have a say at future Group of Seven meetings after the single currency is adopted by 11 of the 15 EU states next month.

The proposal also gives the chairman of the euro-11 group the role of euro spokesman - meaning that small, non-G7 European states would, for the first time, be offered seats at summits on a rotation basis.

Mr Lafontaine, who has stirred controversy in his first five weeks of office, is a firm backer of the proposal.

However, US officials, who along with other G7 members must give their approval, immediately saw the move as a bid by the European bloc to dominate the international economic forum - which Germany chairs at the start of next year.

The US has long advocated having a single point of contact in Europe and is worried that changing faces around the G7 table would undermine the group's focus.

With Germany also chairing the euro-11 in the first half of 1999, the plan would effectively make Mr Lafontaine the euro's first spokesman at international meetings.

Pledging to raise the issue during talks set for tomorrow with US Treasury Secretary, Mr Robert Rubin, and Federal Reserve chairman, Mr Alan Greenspan, Mr Lafontaine made clear how he understood that role.

"The euro-11 chairman is the political voice of the euro zone - that is decisive," he told reporters in Brussels on Tuesday.

However, he has looked increasingly isolated in recent weeks as the European Central Bank and Germany's own Bundesbank flatly rebuffed his calls for interest rate cuts to promote economic growth and job creation.