Agence France Presse

London, February 5:

Top finance officials from some of the world’s richest countries were to meet here today deeply divided and deadlocked on how to attack global poverty despite a vibrant personal appeal for action by former South African president Nelson Mandela.

Finance ministers and central bankers from the Group of Seven, in the face of US-European differences, failed to reach common ground on development aid during a working dinner yesterday that was followed by a meeting of their deputies that went on until early today, European officials said.

Ministers earlier in the evening met with Mandela who urged them to back a doubling in annual development assistance to $100 billion and to approve 100 per cent debt cancellation for Africa.

“I urge you to act tonight, do not delay when poor people continue to suffer,” Mandela said.

But in subsequent talks, according to German secretary of state for finance Caio Koch-Weser, “the Americans were in a completely different frame of mind from the Europeans.”

Under discussion was an ambitious scheme proposed by Britain that would fund a

package of financial assistance of up to $100 billion a year and provide debt relief and trade benefits.

US Undersecretary of the Treasury John Taylor said here during yesterday that the plan “doesn’t work” for the US. US officials have cited legal problems in connection with the

plan, known as the International Finance Facility, and have pointed to their own proposals for debt cancellation and the transformation of World Bank loans into grants.

Ministers and central bankers from the Group of Seven, Britain, Canada, France, Germany, Italy, Japan and the United States, were to re-convene here today for talks on

currency matters and economic growth prospects, but European sources said further debate

on development aid was also possible.

France and Germany were expected to announce their own development initiative here if disagreements within the G7 persist, a European source said.

Following morning talks the ministers and bankers were to have lunch with Chinese counterparts and were later to issue a declaration certain to be rigorously deconstructed by currency traders the world over.

But G7 sources have said the document will probably break no new ground and will merely reiterate previous appeals for exchange rate stability and, where appropriate, flexibility.

The latter reference pertains to certain Asian currencies,

notably the Chinese yuan, that are pegged to the dollar and are seen in the United States and Europe as undervalued and giving their exports an unfair advantage.

During their lunch with their G7 counterparts, Chinese Finance Minister Jin Renqing and central bank head Zhou Xiaochuan are likely to be told again of the need to move more decisively toward a revaluation of their currency.

China has so far resisted calls to allow the yuan to float according to a timetable set

by the West and analysts say that stance is unlikely to change here.

China has repeatedly pledged to ease its dollar peg but has not said when, maintaining only that any eventual loosening would be gradual.

Europe and the United States meanwhile have clear ideas of what the other needs to do eliminate imbalances and pockets of sluggishness in the world economy.