Pressure is building for an early move towards a more co-ordinated approach to global economic management among the large economic powers.

The upcoming summit of the G7 industrial nations in Bonn, Germany at the end of February has been touted by both the French and British finance ministers as the key date for measures to be announced, including reform of the International Monetary Fund (IMF) and some debt write-offs for poorer countries.

Meanwhile the US Vice-President, Mr Al Gore, has indicated that President Bill Clinton will propose significant debt write-offs for the poorest countries in his Budget plan next week.

The US has also been coming under substantial pressure from both European and Asian politicians to come to an agreement about co-ordinating exchange movement co-operation.

In Davos, Switzerland yesterday, European and Asian politicians repeatedly called for greater co-operation in international economic management, with the French minister for the economy Mr Dominique Strauss-Kahn being particularly vocal.

The global economy needed two engines, the US and Europe, he said, and not just one. But to succeed, there had to be new levels of co-operation. And he said he was optimistic that these measures would be delivered at the upcoming G7 meeting, which would be "extremely important".

Mr Strauss-Kahn also called for more accountability for the IMF and World Bank. "Brazil and Russia showed the dangers of a lack of information and of the absolute necessity of greater transparency and surveillance."

But exactly how far the G7 meeting will go is still open to question. The British Chancellor of the Exchequer, Mr Gordon Brown, sounded a note of caution, stating that, while there was an agreed agenda, the "question is if we will implement it".

Nevertheless, he said, 1999 would be a year of implementation, where 1998 was a year for analysis.

So far, Mr Brown added, a new global standing committee had been proposed. This would be a combination of international and national regulators which would regulate and conduct systematic surveillance of the world's financial system. "It will in effect be an early warning system on financial issues and I believe we should have this in place before the summer," he said.

Mr Brown and Mr StraussKahn agreed that there was a window of opportunity to write off at least some of the debt of the poorest states, particularly in Africa, a point supported by Mr Gore, who indicated the early US move in this area. The German deputy finance minister, Mr Heiner Flassbeck, standing in for Mr Oskar Lafontaine, also insisted that the most important issue for the G7 was to take a global approach to dealing with problems.

The best way for Europe to contribute, he said, was to stimulate domestic demand. But he warned that, for the first time in 50 years, the world is facing a slowdown in the industrialised countries and is now in danger of entering a deflationary period.

The "huge imbalance" in terms of economic performance between the US and Europe also came in for much criticism from European, as well as Asian, leaders. According to Mr Flassbeck, the gap must be closed by higher growth in Europe. If that were to happen there would be no danger of huge, unsettling movements in exchange markets, he said.

Singapore's senior minister, Mr Lee Kuan Yew, was more forthright, insisting that Europe and Japan have got to persuade the Americans that the current system is too painful.

"The Americans forget they have something no one else has. They can borrow in the their own currency and then pay it back by simply printing US dollars. No one else can do that."

He added that, if the US does not respond further, trouble will make the world "look like a very precarious place indeed".

Japan's Vice-Minister of Finance for International Affairs, Mr Eisuke Sakakibara, known as Mr Yen, was less than optimistic, declaring the complacency of the money markets to be unwarranted.

But he insisted that Japan's economy was on the point of turning. "The financial panic which started in October 1997 is about to end," he said. This would also allow Japan to step up the provision of money to the ASEAN countries and to Korea.

This was disputed somewhat by a "sceptical" US Deputy Secretary to the Treasury, Mr Lawrence Summers, who cautioned that the same message would have come from the last several annual meetings at Davos and perhaps some time should be allowed before believing it this time.

Mr Summers also repeatedly tried to kill the suggestion that there ought to be co-operation in exchange movements. But, as Mr Fred Bergsten, director of the US Institute for International Economics, noted, with pressure coming from both sides of the G7, the US would have little option but to move in the end.

Mr Bergsten also believes that 1999 will be the "year of reckoning" for the dollar, when it will collapse under pressure from the enormous US current account deficit.

This will add to the pressure for the G3 - the euro zone, Japan and the US - to manage their exchange rates more actively through a system of "controlled flexibility", allowing agreement on wide equilibrium ranges of about 20 to 30 per cent. Joint intervention and further rate cuts could be deployed to keep the currencies within these bands.

"Some co-operation and co-ordination between the G7 is desirable, but I am sceptical whether some of these measures would stabilise the situation," Mr Summers said.