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West German President Urges U.S. to Trim Deficit

October 28, 1987|WILLIAM TUOHY | Times Staff Writer

WEST BERLIN — West German President Richard von Weizsaecker declared here Tuesday that if the United States reduces its budget deficit, European nations should expand their economies.

The Federal Republic president was suggesting a means to contain the current worldwide financial crisis, and while his is a largely ceremonial post, he is listened to carefully by policy-makers in Bonn.

Von Weizsaecker's remarks in a speech to the Aspen Institute Berlin came as the West German government reported its second-highest monthly trade surplus in history.

In September, German exports jumped 27% over August, far outpacing a rise of 16% in imports, indicating that German industries were not feeling the effect of the high German mark and low dollar in international trade.

"This could mean that U.S. pressure for a dollar decline will increase," said Ulrich Wittman, an official of the Bank of Liechtenstein's Frankfurt office.

The dollar dropped to a 6 1/2-year low Tuesday, falling below the 1.77-mark level from 1.775 on Monday. A declining dollar translates into lower prices for U.S. goods in foreign countries.

U.S. Treasury Secretary James A. Baker III and other U.S. officials have complained that the West German government should be expanding the country's economy to absorb American goods and other imports, rather than imposing monetary restrictions such as raising its interest rates as it did shortly before the Wall Street crash last week.

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