The U.S. defense of the agreement is that the U.S. power to push for the renewal of the non-pegging agreement will, in two years, be as strong as it was at the same time; and secondly, that it would be very risky anyway for some European central banks to flood the price of gold in the face of strong opposition from the United States. Indeed, a low-priced commitment could soon put the new price under speculative market pressure, while a high-priced commitment could see the United States gradually sell its gold to European central banks on the most advantageous terms. The amendment of the IMF agreement and the increase in IMF quotas require congressional approval. After a final technical review by the IMF Executive Committee, the entire package is expected to be submitted to Congress in mid-April. Although some Members have expressed some concerns about certain aspects of the gold agreement, I expect Congresses to support the package as a whole. We have kept Congress informed during the negotiation of the agreement and will work closely with key members and committees to prepare for the formal presentation of the legislation. In addition, there was a second big difficulty. A deliberate decision by the ministerial committee to give countries the right to choose the exchange rate agreements they prefer would have been one thing. But that is not at all what the ministers had in mind in March 1973 when they approved their communiqué. While some ministers, particularly the United States and the Germans, have increasingly advocated the introduction of flexible exchange rates for an indeterminate period, a large majority of ministers continued to advocate a rapid return to fixed exchange rates. Indeed, the solutions proposed in the structure for the other major problem, the future reserve system, are explicitly based on a system of parity.

In recent years, steps have been taken to mitigate these risks. Nevertheless, the rapid expansion of the eurodollar market means that it remains a weak point both in terms of strength and liquidity control. The Jamaican agreement contains no provisions to resolve these problems. In the end, the French insistence, faithfully supported by the American authorities, was required for the agreements to be implemented immediately after an agreement was finally reached.

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