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| Economy | |
| 5-Leaders play down austerity split on eve of G20 | |
| 2010-06-26 | |
HUNTSVILLE, Ontario, June 25 (Reuters) - The world's richest economies, saddled with huge debts after spending their way out of the credit crisis, papered over differences on Friday on how to clean up their finances with minimal damage to growth.
Washington appeared to be at loggerheads with Berlin in the run-up to the Canada summits. U.S. officials expressed concerns that a nascent recovery from the global recession could be derailed by accelerating austerity in much of Western Europe. German Chancellor Angela Merkel said, however, that the G8 talks had not produced any conflict over economic policy. "The discussion was not controversial but was based on great mutual understanding," she told reporters. A U.S. official said, "There is a broad consensus among the G8 leaders, a convergence of views ... about how to maintain durable growth while also reaffirming, of course, the common shared commitments to fiscal consolidation going forward." According to off-the-record briefings by European officials, U.S. President Barack Obama told his counterparts he was worried that excessively deep and fast cuts in Europe could eat into growth, but he did not question the need for cuts themselves. The Group of 20 has struggled to keep the unity of last year when governments pumped trillions of dollars into the economy to prevent recession turning into depression and vowed to prevent another credit crisis from endangering the world economy. Obama, buoyed by a deal in the U.S. Congress in the early hours of Friday to toughen rules for Wall Street, urged other G20 leaders to make good on promises to curb risky bank behavior that sparked the financial crisis in 2007. "We need to act in concert for a simple reason: this crisis proved, and events continue to affirm, that our national economies are inextricably linked," Obama said, calling on other leaders to match the U.S. progress on financial reform. | |
| Posted by:Steve White |
| #1 It takes a peculiar sense of humor to characterize a cut in government spending below 50% of GDP as "austerity." |
| Posted by: Perfesser 2010-06-26 10:04 |