One of the most challenging issues facing the leaders of the
seven industrial nations now meeting in London is how to deal
with the $800 billion or so in debt owed by developing nations.
In that regard, the summit leaders have a clear role model to
look at in putting together a solution: namely, the debt
agreement now being worked out between Western banks and Mexico.
Federal Reserve Board chairman Paul Volcker - who has followed
the third-world debt issue perhaps more closely than most heads
of state - calls the new Mexican approach a ''pattern'' that
could well be used in renegotiating third-world debt. And
indeed, the Mexican agreement comes at just the right moment.
The presidents of seven Latin nations whose governments
collectively owe Western and Japanese banks $350 billion have
sent a plea to the summit leaders to find an urgent solution to
the problem. Thus, the Mexican loan renegotiations seem
particularly important. They involve quid pro quos. From Mexico,
tough austerity measures. From the commerc