As G20 chases growth goal, members differ on how to get there

Sat Sep 20, 2014 6:39am EDT
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By Lincoln Feast and Gernot Heller

CAIRNS Australia (Reuters) - Financial leaders of the Group of 20 top economies remain committed to chasing higher global growth, but were divided on how to achieve it as Germany pushed back at calls from the United States and others for more immediate stimulus.

Opening a meeting of G20 finance ministers and central bankers, Australian Treasurer Joe Hockey outlined on Saturday an ambitious agenda of boosting world growth, fireproofing the global banking system and closing tax loopholes for giant multinationals.

"We have the opportunity to change the destiny of the global economy," said Hockey, who back in February launched a campaign to add 2 percentage points to world growth by 2018 as part of Australia's presidency of the G20.

That goal has seemed ever more distant as members from China to Japan, Germany and Russia have all stumbled in recent months. Just this week, the Organisation for Economic Cooperation and Development (OECD) slashed its growth forecasts for most major economies.

U.S. Treasury Secretary Jack Lew called for the euro zone and Japan to do more to boost demand and revive activity, signaling out Germany as having scope to do much more thanks to its burgeoning trade surplus.

Berlin was none too pleased.

"We will not agree on short-sighted stimuli," a German G20 delegate said, arguing that in most countries debt was still too high to allow for increased spending.

Germany has been under intense pressure to allow the euro zone to ease back on fiscal austerity and to boost its own economy through more government spending or tax cuts.   Continued...

U.S. Treasury Secretary Jack Lew (R) stands with his Australian counterpart Joe Hockey during a media conference at the start of the G20 Finance Ministers and Central Bank Governors meeting in the northern Australian city of Cairns September 19, 2014.  REUTERS/Lincoln Feast