EU says China, U.S., Japan also have economic work to do

Fri May 25, 2012 6:40pm EDT
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By Barbara Lewis

BRUSSELS (Reuters) - The United States and Japan must tackle their tax issues and China must relax restrictions on the yuan, as they share responsibility with Europe for restoring global economic health, EU leaders said ahead of a June summit of the G20 leading economies.

In a letter addressed to all 27 European Union nations, European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy said Europe was doing it all it could.

"Europe has stepped up and assumed its special responsibility for securing the financial stability of the euro area and we will continue to do so," said the letter in the run up to the G20 summit in Los Cabos, Mexico.

"It is now up to all G20 members to enhance their efforts and deepen our cooperation in order to ensure a sustained global economic recovery."

In particular, it looked to the United States to avoid falling off a "fiscal cliff" and called on China to deliver reforms.

"Whilst we are firmly focused on playing our part, at Los Cabos, all other G20 partners should also recognize their responsibilities in building a sustainable recovery," the letter said.

It said the United States and Japan needed to implement "credible medium-term fiscal consolidation plans" and the United States must avoid the problems that could result from tax rises and spending cuts meant to take effect at the end of the year.

"We should also call on China to continue strengthening its social safety nets, carry out further structural reforms and move to a market-determined exchange rate."   Continued...