At the end of November, when it became clear that the Group of Ten countries were approaching an agreement on currency conversion, the executive directors of the developing members formally wrote to Mr. Schweitzer to insist that a broader meeting than that of the Executive Board be convened. For this reason, a fifth joint meeting of the Executive Directors and alternates of the Group of Ten was held in Washington on 16 December 1971 (the previous four took place between November 1966 and June 1967 and were described in Part One). Representatives of the Swiss National Bank, OECD, biz and EEC also participated in the meeting. All of these new relationships went into effect within a week of the Smithsonian agreement. The Canadian dollar continued to push. The agreed exchange rate relationships are summarized in Table 17. In the early 1980s, the value of the United States increased the dollar, which pushed up the prices of U.S. exports, thereby increasing the trade deficit. To address the imbalances, five of the world`s largest economies met in September 1985 to find a solution. The five countries were Great Britain, France, Germany, Japan and the United States; This group was known as the Group of Five, abbreviated as G5.
The 1985 agreement, called the Plaza Accord because it took place at the Plaza Hotel in New York, focused on reducing the value of the U.S. dollar through a collective effort. The reactions of the executive directors to the US measures, expressed on 16 August, illustrated the initial reactions of most monetary agents. There was indeed an atmosphere of crisis. Many executive directors insisted to Mr. Dale on the intentions of the US authorities, in particular with regard to the exchange rate situation, which would probably occur immediately, and with regard to the import supplement. Several felt that it was urgent, therefore in the coming days, to negotiate new values by. When the Executive Directors took over a draft decision containing the Fund`s response to the U.S. submission, Mr.
Dale said that the U.S. authorities considered the U.S. measures to be indispensable to give industrialized countries a trade and trade dynamic that is essential to correct the imbalance in global payments. . . .