G20 urges U.S. to act quickly to avoid default

Sat Oct 12, 2013 6:09am EDT
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By Anna Yukhananov and Louise Egan

WASHINGTON (Reuters) - Finance officials from the world's biggest economies on Friday pressed the United States to head off a potentially devastating default and vowed to proceed carefully when the time comes to normalize monetary policy.

A communiqué issued at the end of a meeting of Group of 20 finance ministers and central bankers said the United States "needs to take urgent action to address short-term fiscal uncertainties."

The U.S. government has been partially shut since October 1 amid a budget standoff between congressional Republicans and the White House. Republicans also have refused to raise the nation's $16.7 trillion debt ceiling.

Officials from around the globe have warned that failing to raise the debt cap would wreak havoc on the global economy.

Anton Siluanov, finance minister of this year's G20 chair, Russia, said the mention in the group's communiqué amounts to a "general wish for a fast solution."

Republicans presented a plan on Thursday to provide a short-term increase in the U.S. debt limit, spurring hopes a deal could soon be reached. On Friday, the White House and lawmakers were still struggling to work out the details.

"Our American colleagues are doing everything possible in order to find a mutual understanding or agreement with the Congress," Siluanov told reporters.

Solving the impasse is crucial for a global economy that the G20, which accounts for 90 percent of world output and two-thirds of its population, said is showing signs of improvement but still facing "downside risks."   Continued...

Australia's opposition treasury spokesman Joe Hockey answers questions during a Reuters' interview at his electorate office in North Sydney, in March 26, 2012 file photo. REUTERS/Tim Wimborne/Files