09/25/00- Updated 10:52 AM ET

Finance chiefs hope for market magic PRAGUE, Czech Republic (AP)  World finance officials, facing the twin threats of soaring oil prices and a weak European currency, were scoring some initial success Monday in their effort to use strong words and selected market manipulation to corral prices.

The euro, used by 11 European Union nations, was being sold for 87.4 cents in afternoon trading in London, down only slightly from the levels it had been pushed to by a surprise coordinated intervention Friday by Europe and its rich allies.

Oil was down by 92 cents a barrel on the London futures market, with Brent crude from the North Sea trading at $30.33 on contracts for November delivery.

Gathered for the annual meetings of the International Monetary Fund and the World Bank, finance ministers devoted Monday to fashioning another joint statement of concern about problems facing the globe  this one on the need for enhanced poverty reduction for the half of the world where people live on less than $2 per day.

The government of Italy added deeds to the good words, contributing an additional $70 million to the effort to provide debt relief to the world's poorest countries. With the extra money, Italy has fulfilled its pledge of $169 million.

World Bank President James Wolfensohn, in accepting the contribution, said Italy's example, if followed by other rich countries, would enable the bank to move forward with its effort to double the number of countries getting debt relief to 20 by the end of this year.

''A radical shift in the way aid is used to promote development is needed in order to overcome the shortcomings of traditional assistance mechanisms,'' Antonio Fazio, the head of Italy's central bank, said in a speech to the World Bank's policy-setting Development Committee.

U.S. Treasury Secretary Lawrence Summers, in his remarks to committee, praised the bank for beginning a $500 million program to combat AIDS in Africa and for tripling the amount of lending it is doing to deal with all communicable diseases.

''The overarching global imperative to work to combat poverty ... must gain added urgency today when HIV-AIDS, conflict and other catastrophes are helping to reverse years of development gains in the poorest countries,'' Summers said.

With the preliminary work wrapped up by the steering committees, the IMF and World Bank will formally open their annual meetings with finance officials from 182 nations on Tuesday.

That is the day hundreds if not thousands of protesters have earmarked to stage a repeat of the so-called Battle in Seattle by forming a human chain around the giant communist-era convention hall where the meetings are being held.

Through Monday, however, the warmup demonstrations have been sparsely attended, in part because Czech authorities said they were detaining demonstrators at the border if they were found to have arrest records from the Seattle protests.

The International Monetary and Financial Committee, the top policy-setting committee for the IMF, issued a statement late Sunday in which the finance leaders agreed to strive for policies that promote ''stability in oil markets around reasonable long-term goals.''

''This is the IMF at its best working to bring oil producers and consumers together,'' said Gordon Brown, British chancellor of the exchequer and the chairman of the IMF steering committee, who spearheaded the behind-the-scenes negotiations between oil producing and consuming countries to get language all could agree to.

The coordinated intervention on behalf of the euro worked to push the new European common currency off its lows but analysts expected more coordinated action will be needed before the markets are convinced the euro's value should be higher.

''It is clear that the G-7 will come in with further intervention. They have made a commitment now and they must follow through,'' said C. Fred Bergsten, head of the Institute for International Economics, a Washington think tank.

New IMF Managing Director Horst Koehler said Sunday his proposals for overhauling operations of the IMF had been generally endorsed during the discussions Sunday.

''The reform concept was today deepened and accelerated,'' said Koehler, a former German finance official who inherited an agency under heavy attack, not just from anti-globalization protesters but from members of the U.S. Congress who felt it had badly botched the 1997-98 Asian currency crisis.

http://www.usatoday.com/money/mds023.htm

-- Martin Thompson (mthom1927@aol.com), September 25, 2000