The Bonn Economic Declaration:
Towards Sustained Growth and Higher Employment
Bonn, Germany, May 4, 1985
- Conscious of the responsibility which we bear, together
with other governments, for the future of the world economy and
the preservation of natural resources, we, the Heads of State
or Government of seven major industrial nations and the President
of the Commission of the European Communities, meeting in Bonn
from 2 to 4 May 1985, have discussed the economic outlook,
problems, and prospects for our countries and the world.
- World economic conditions are better than they have been
for a considerable time. Since we last met, further progress
has been achieved in bringing down inflation and strengthening
the basis for growth. The recovery in the industrial countries
has begun to spread to the developing world. The debt problems
of developing countries, though far from solved, are being flexibly
and effectively addressed.
- Nevertheless, our countries still face important challenges.
Above all, we need:
- to strengthen the ability of our economies to respond to
- to increase job opportunities;
- to reduce social inequalities;
- to correct persistent economic imbalances;
- to halt protectionism; and
- to improve the stability of the world monetary system.
- Our discussions of these challenges have led us to
the following conclusions:
- The best contribution we can make to a lasting new prosperity
in which all nations can share is unremittingly to pursue, individually
in our own countries and cooperatively together, policies conducive
to sustained growth and higher employment.
- The prosperity of developed and developing countries
has become increasingly linked. We will continue to work with
the developing countries in a spirit of true partnership.
- Open multilateral trade is essential to global prosperity
and we urge an early and substantial reduction of barriers to
- We seek also to make the functioning of the world monetary
system more stable and more effective.
- Economic progress and the preservation of the natural
environment are necessary and mutually supportive goals. Effective
environmental protection is a central element in our national
and international policies.
[back to top]
Growth and Employment
- In order to sustain noninflationary growth and higher
employment, we have agreed that:
- We will consolidate and enhance the progress made in bringing
- We will follow prudent, and where necessary strengthened
monetary and budgetary policies with a view to stable prices,
lower interest rates and more productive investment. Each of
our countries will exercise firm control over public spending
in order to reduce budget deficits, when excessive, and, where
necessary, the share of public spending in Gross National Product.
- We will work to remove obstacles to growth and encourage
initiative and enterprise so as to release the creative energies
of our peoples, while maintaining appropriate social policies
for those in need.
- We will promote greater adaptability and responsiveness
in all markets, particularly the labor market.
- We will encourage training to improve occupational skills,
particularly for the young.
- We will exploit to the full the opportunities for prosperity
and the creation of permanent jobs, provided by economic change
and technological progress.
- Building on these common principles, each of us has indicated
the specific priorities for national policies.
- The President of the United States considers it essential
to achieve a rapid and appreciable cut in public expenditures
and thus a substantial reduction in the budget deficit. He stresses
also the need for further deregulation and for a reform of the
tax system aimed at encouraging the efficient use of resources
and stimulating new saving and investment.
- The President of the French Republic stresses the need
to continue bringing down inflation, to modernize the means
of production and to improve employment, to control public spending
and to combat social inequality. In that context he attaches
high priority to education, research and investment in high technologies
with a view to sustained growth.
- The Government of the United Kingdom will continue to work
to reduce inflation and to create the conditions for sustained
growth. It will continue to keep public spending under strict
control and maintain monetary discipline. It will promote the
development of small and mediumsized businesses and advanced technological
industries, and encourage initiative and enterprise and the creation
of new job opportunities.
- The Government of the Federal Republic of Germany attaches
high priority to strengthening the flexibility and vigor of the
economy in order to achieve a lasting improvement in growth and
to create new jobs. Small and mediumsized businesses should be
especially encouraged as well as high technologies. It will continue
to reduce the claims of the public sector on the economy, the
budget deficit and the burden of taxation.
- The Government of Japan considers it essential to persevere
with its policy of budgetary discipline and strengthening market
functions, particularly with a view to fostering investment.
It intends to achieve further progress in deregulating financial
markets, promoting the international role of the yen, facilitating
access to markets and encouraging growth in imports.
- The Italian Government gives priority to the further reduction
of inflation and of the public deficit, while sustaining growth
and investment. Particular emphasis will be put on incentives
to create small and mediumsized industries, especially in the
field of high technology, and to promote employment, especially
for young people.
- The Government of Canada will focus on promoting investment
and creating jobs in the private sector, on removing obstacles
to sustained noninflationary growth, on reducing the budget deficit
and on restraining government expenditure. It will encourage
entrepreneurial activities, with emphasis on the small and mediumsized
- The Commission of the European Communities attaches high
priority to completing a genuine internal market without barriers,
which will eliminate rigidities and generate fresh economic growth
on a Communitywide scale. A strengthened European Monetary System
and closer economic convergence will further serve this end.
By pursuing these policies we will not only address our domestic
problems, but at the same time contribute to an enduring growth
of the world economy and a more balanced expansion of international
[back to top]
Relations with Developing Countries
- Sustained growth in world trade, lower interest rates,
open markets and continued financing in amounts and on terms
appropriate to each individual case are essential to enable developing
countries to achieve sound growth and overcome their economic
and financial difficulties. Flows of resources, including official
development assistance, should be maintained and, wherever possible,
increased, especially to the poorer countries. In particular,
more stable longterm finance, such as direct investment from industrial
countries, should be encouraged. We welcome longerterm debt restructuring
agreements between debtor countries and commercial banks. We
continue to stand ready, where appropriate, to negotiate further
multi year reschedulings of debts to governments and government
- We continue to encourage the constructive dialogue with
the developing countries in the existing international institutions
with a view to promoting their economic development and thereby
their social and political stability. We emphasize the crucial
role of, and the improved cooperation between, the International
Monetary Fund and the World Bank Group in supporting policies
by debtor countries necessary to strengthen the confidence of
domestic and foreign creditors and investors, to mobilize domestic
savings and to ensure efficient use of resources and sound longterm
development. We agree to work to ensure that these institutions
are equipped with the necessary resources and instruments, and
we stand ready to discuss an increase in the resources available
to the World Bank which may be necessary in the coming years.
We remain concerned over the particular problems facing a number
of developing countries that are neither among the poorest nor
foremost among the group of major debtors. We agree that consideration
should be given to easing the financial constraints of these countries
on a casebycase basis.
- We are deeply concerned about the plight of African peoples
who are suffering from famine and drought. We welcome the
positive response from our citizens and from private organizations,
as well as the substantial assistance provided by the governments
of many countries and the establishment by the World Bank
of the Special Facility for Sub-Saharan Africa. We shall continue
to supply emergency food aid. In addition, we shall intensify
our cooperation with African countries to help them develop their
economic potential and a longterm food strategy, based on their
own agricultural programs. We are prepared to promote increases
in food production by supplying agricultural inputs
such as seed, pesticides and fertilizers, within the framework
of agricultural development projects. We agree upon the need
to improve the existing early warning systems and improve
transportation arrangements. Political obstacles in the countries
concerned should not be allowed to stand in the way of the
delivery of food to the hungry. We emphasize the need to examine
the establishment of a research network on dry zone grains. We
shall strengthen our cooperation with African countries in fighting
against desertification. Continued efforts are needed by all
countries in a position to contribute to any or all of this work.
We call upon the Soviet Union and other Communist countries to
assume their responsibilities in this regard. We have set up
an expert group to prepare proposals for followup measures to
be reported to Foreign Ministers by September 1985.
[back to top]
Multilateral Trading System and International Monetary
- Protectionism does not solve problems; it creates them.
Further tangible progress in relaxing and dismantling existing
trade restrictions is essential. We need new initiatives for
strengthening the open multilateral trading system. We strongly
endorse the agreement reached by the OECD Ministerial Council
that a new GATT round should begin as soon as possible. Most
of us think that this should be in 1986. We agree that it would
be useful that a preparatory meeting of senior officials should
take place in the GATT before the end of the summer to reach a
broad consensus on subject matter and modalities for such negotiations.
We also agree that active participation of a significant number
of developed and developing countries in such negotiations is
essential. We are looking to a balanced package for negotiation.
- It is also essential to improve the functioning of the
international monetary system. We take note that the Finance
Ministers of the Group of Ten, at their meeting in Tokyo in June,
intend to complete their current work on ways to improve the functioning
of the monetary system and to put forward proposals, to be
discussed at the next meeting of the Interim Committee of the
International Monetary Fund in Seoul in October, with a view to
making the international monetary system more stable and more
[back to top]
- New approaches and strengthened international cooperation
are essential to anticipate and prevent damage to the environment,
which knows no national frontiers. We shall cooperate in order
to solve pressing environmental problems such as acid deposition
and air pollution from motor vehicles and all other significant
sources. We shall also address other concerns such as climatic
change, the protection of the ozone layer and the management of
toxic chemicals and hazardous wastes. The protection of soils,
fresh water and the sea, in particular of regional seas, must
- We shall harness both the mechanisms of governmental
vigilance and the disciplines of the market to solve environmental
problems. We shall develop and apply the "polluter pays"
principle more widely. Science and technology must contribute
to reconciling environmental protection and economic growth.
- Improved and internationally harmonized techniques of
environmental measurement are essential. We invite the environmental
experts of the Technology, Growth and Employment Working Group
to consult with the appropriate international bodies about the
most efficient ways for achieving progress in this field.
- We welcome the contribution made by the Environment
Ministers to closer international cooperation on environmental
concerns. We shall focus our cooperation within existing international
bodies, especially the OECD. We shall work with developing countries
for the avoidance of environmental damage and disasters worldwide.
[back to top]
Cooperation in Science and Technology
- We are convinced that international cooperation in research
and technology in major projects should be enhanced to make maximum
use of our scientific potential. We recognize that such projects
require appropriately shared participation and responsibility
as well as adequate rules concerning access to the results achieved,
the transfer of technology and the use of technologies involved.
- We welcome the positive responses of the Member States
of the European Space Agency (ESA), Canada and Japan to the invitation
of the President of the United States to cooperate in the United
States Manned Space Station Program on the basis of a genuine
partnership and a fair and appropriate exchange of information,
experience and technologies. Discussions on intergovernmental
cooperation in development and utilization of permanently manned
space stations will begin promptly. We also welcome the conclusions
of the ESA Council on the need for Europe to maintain and expand
its autonomous capability in space activity, and on the longterm
European Space Plan and its objectives.
- We welcome the report from the Technology, Growth and
Employment Working Group on the work done in the eighteen areas
of cooperation and invite the Group to complete its review by
the end of the year. We welcome the positive contribution which
the Ministerial Conference on "Technological Development
and Employment" held in Venice has made towards wider acceptance
of the role of technological change in promoting growth and employment.
We also welcome the results of the Rambouillet Conference
on Bioethics and thank the Federal Republic of Germany for its
willingness to host a symposium on neurobiology in 1986.
- We have agreed to meet again next year and have accepted
the Japanese Prime Minister's invitation to meet in Japan.
[back to top]
Source: U.S., Department of State, Bulletin,
No. 2100 (July 1985): 3-6; Economic Summits, 1975-1986:
Declarations (Rome: Istituto Affari Internazionali, 1987):
123-131; Great Britain, Foreign and Commonwealth Office, Declarations
of Annual Economic Summits, 1975-1986 (London, 198-):
A11 Bonn, 1-7 [unpublished]; Germany (West), Presse- und Informationsamt
der Bundesregierung, Bulletin, No. 48 (May 7, 1985):
410-15; Germany (West), Presse- und Informationsamt der Bundesregierung, Pressemitteilung: Bonn Economic Summit 1985: Final Communiqué (Bonn).