The World Economy: The Dollar and the Summit

The next annual economic summit is scheduled to be held in Bonn in May 1985. What follows is a more or less fanciful account of its proceedings-not a prediction of the eventual reality, but a depiction of where present domestic and international economic trends are leading. Foremost among these trends is the growth of the U.S. trade and budget deficits. Conceivably, by next May, the actors at the Bonn Summit will have seen signs that these deficits are being reduced. More likely they will not, and the Summit will open in full awareness of the dangers that these deficits pose to the global economy.

The dramatization that follows aims to portray what might happen in the absence of effective measures to avert these dangers. Any resemblance between the heads of government described herein and those now in office is, as they say, purely coincidental. The scenario is illuminated by the author's experience as a "sherpa" at the summits of 1977, 1978, 1979 and 1980.

The time is May 1985. The scene is a large building in the federal government compound in the West German capital, which is distinguished from other nearby buildings mainly by its lack of distinction. Its style is 1905 functional. Two sentries from the German armed forces stand at the entry. They present arms as each of eight political leaders-the heads of government of Canada, France, Germany, Italy, Japan, Great Britain and the United States, and the President of the European Community-enters. The 1985 Bonn Economic Summit of the seven major industrial democracies is about to begin.

This is the ninth in a series of summits which started in 1975, when President Valéry Giscard d'Estaing of France convened the first meeting at Rambouillet. Since the 1970s, the heads of government have moved away from detailed and specific summit agreements. They prefer substantive exchanges that do not require major changes in the participants' policies. That is what they achieved at Ottawa in 1981, Versailles in 1982, Williamsburg in 1983 and London in 1984: useful discussions, rather than agreement on new actions.

The need to do more, however, is in their minds as the gavel of the German Chancellor calls them to order. This need has been underlined by recent events.