European finance ministers yesterday were urged to pay mere attention to control of inflation and to resist suggestions for strong expansionary policies to reduce unemployment.
This message was delivered to the initial session of a two-day meeting of the International Monetary Fund's policy-making Interim Committee by two key international civil servants.
They are IMF Managing Director H. S. Witteveen and Emile Van Lennep, spokesman for the world's leading industrial countries. Lennep is secretary-general of the Paris-based Organization for Economic Cooperation and Development.
Lennep said that "a strong revival in business investment" is not likely in the OECD countries in 1978, except in the United States, unless inflation can be held under control. Therefore, he recommended aiming at only a "moderate" rate of economic growth.
He quoted Witteveen as saying to the committee that "a switch to strongly expansionary policies designed to reduce unemployment quickly would probably be futile and would soon lead to a new inflationary recession."
Hans Apel, West German minister of finance, bluntly told the committee that his country would not push for a growth rate beyond 5 per cent this year, as it had been implored to do by President Carter at the beginning of his administration.
The U.S. position has been weakened by withdrawal of the $50-per-person rebate proposal as part of a stimulus program and by stiff resistance from the West Germans and the Japanese.
The dominant theme at the moment is to try to achieve the growth rates individually set out by the major countries for this year, in an effort to assure there will be no recession in 1977.
Lennep said that even with recent slow economic growth and rising unemployment, the rate of inflation in OECD countries had soared from 8 per cent last year to 11 per cent early this year.
"These developments do not imply that the strategy being followed is a failure and should be abandoned, a suggestion which has been made in some quarters," Lennep said.
He said that the other nations in his organization should emulate Carter's goal -- but not necessarily using the same numbers -- of cutting the inflation rate from 6 to 4 per cent by the end of 1979.
At a breakfast meeting with reporters, Robert Boulin, the French delegate to the meeting, noted that "more" expansion was needed from the United States, Germany and Japan, "but not too much." Boulin also stresses the anti-inflation theme and the need for the summit to develop "a better harmonization" among nations' policies.
This theme, it was learned, was a major focus of a secret meeting among the "big Five" finance ministers in Paris last Saturday preliminary to the sessions this week and in London next week.