G20 summit must focus on growth, Geithner says

Sat Jun 26, 2010 4:46pm EDT
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By Jeffrey Hodgson and Caren Bohan

TORONTO (Reuters) - World leaders must focus on bolstering growth in a global economy still scarred by crisis, Treasury Secretary Timothy Geithner said on Saturday as the heads of the Group of 20 nations gathered in Canada.

Geithner played down the notion of a rift among leaders over how quickly to cut budget deficits, saying even European leaders rushing to tighten spending recognized the importance of reigniting an uneven global recovery.

"We have to make sure that people understand that we are going to take the steps necessary to bring down our deficits over time. But we also need to make sure we're growing," he told reporters in Toronto.

"That balance is going to differ across countries. But I think you're going to see a strong commitment again by these major economies to do what is necessary to make sure that we are supporting recovery and getting that balance right."

The Obama administration worries that hitting the brakes too abruptly on economic stimulus could risk a repeat of the mistakes that prolonged the Great Depression in the 1930s.

"The scars of this crisis are still with us. So, this summit must be fundamentally about growth," he said.

Even as U.S. officials warned about cutting stimulus too quickly, Germany and other European countries fear the threat of spreading contagion from the sovereign debt crisis in Greece and want to reassure markets of their commitment to reining in deficits.

The differences had been highlighted by recent comments from U.S. and European officials on economic priorities. But Geithner said the message from the continent's leaders was about more than just austerity.   Continued...