As world stock exchanges brace themselves for another week of uncertainty, President Clinton will lead a concerted push to restore confidence in global economies.
The President, who has warned that the world is on a "financial precipice", will join finance ministers and central bank governors from around the world in meetings in Washington this week aimed at restoring confidence to badly shaken financial markets and national economies.
The unusual decision of the President to take part in the annual meetings of the International Monetary Fund and the World Bank underlines the serious concern of the United States at the turmoil in world stock markets and the threat of further crises arising from the situation in Japan, Russia and Brazil.
The Minister for Finance, Mr McCreevy, and the Governor of the Central Bank, Mr Maurice O'Connell, will represent Ireland at the main meetings of the 182nation IMF and World Bank beginning tomorrow.
Finance ministers and central bank governors of the G-7 largest industrial economies at a preliminary meeting here at the weekend endorsed a US plan to give the IMF new powers to aid countries before they are hit by economic crises. President Clinton received support for the plan from the British Prime Minister, Mr Tony Blair, and the French President, Mr Jacques Chirac, in weekend telephone calls.
But it was also acknowledged that the IMF cannot be expected to take on new commitments unless the US Congress votes this week to approve an $18 billion increase in the American contribution to the fund. The Republican-controlled House of Representatives has so far rejected repeated appeals from President Clinton to approve this increase and Congress is due to recess on Friday.
The US Treasury Secretary, Mr Robert Rubin, said after the G-7 meeting of the US, Britain, Canada, France, Germany, Italy and Japan that all the participants had a "very intense focus" on the problems now confronting the global economy. But the final communique was vague about supporting the US plan.
The details are being left to a working group headed by Mr Hans Tietmayer, head of the central bank of Germany which along with Japan is reported to have reservations about it. The idea is that lines of credit be made available by the IMF to countries with sound economies but which are threatened by the financial "contagion" which is sweeping world markets.
Much of the G-7 meeting was devoted to the situation in Japan where the stock market last week plunged to its lowest level in 12 years. The communique encouraged the government in Tokyo to strengthen the financial position of banks with new capital from public funds.
The British Chancellor of the Exchequer, Mr Gordon Brown, sounded a warning note when he said: "We are conscious that more than a quarter of the world is in recession, that the second-largest economy in the world, Japan, is in recession and that the social casualties of the Asian crisis are rising in numbers." He said the Bank of England might start cutting interest rates later this week to encourage growth following the example of the US Federal Reserve last week.
The Central Bank may signal a cut in interest rates this week, the first in a series of expected reductions in the run-up to the introduction of the euro. Some brokers believe a cut in the repo rate (the interest rate at which the central Bank supplies funds to the wholesale market) may come today, but others feel the bank will wait for the publication of the September inflation figures on Thursday before making any move.