CAIRNS Australia (Reuters) - U.S. Treasury Secretary Jack Lew on Friday called on the euro zone and Japan to do more to spur growth as the global economy continues to disappoint, highlighting what is sure to be a bone of contention as Group of 20 ministers meet in Australia.
While lauding the strength of the U.S. economy, Lew said more work was needed to achieve faster and more balanced economic growth and to boost demand in what he called “surplus” countries.
Lew appeared to mean countries that have current account surpluses.
“The United States continues to be a source of strength in the global economy,” Lew said in remarks with his Australian counterpart Joe Hockey.
“But overall, the global economy continues to underperform. This is particularly true in the Euro Area and Japan, while a number of emerging market economies are also slowing,” Lew said at the start of a G20 meeting of finance ministers and central bankers in the northern Australian city of Cairns.
His call is likely to get a cool reception from the Europeans. Speaking during a stopover in Hong Kong, Germany’s Finance Minister Wolfgang Schauble said his country’s economy was robust and that it was important for Europe to stick with the tough path of fiscal reform.
“We are in the global economy and in Europe in a situation, in which we seem to have too much liquidity and too much public debt,” Schauble told reporters.
“That means the room to stimulate growth from the demand side and the monetary-policy-side is - with regional differences - small,” the German minister said.
Berlin has been under intense pressure to allow the euro zone to ease back on fiscal austerity and to stimulate its own economy through more government spending or tax cuts.
The OECD slashed its growth forecasts for major developed economies on Monday, urging Europe to do more to ward off the risk of deflation.
U.S. and other G20 officials have previously flagged concerns about Europe’s tepid economic growth and want Germany to do more to help its neighbours by spending and importing more.
Along with boosting growth, G20 members are working towards finalising regulations aimed at avoiding a repeat of the global financial crisis.
Both Lew and Hockey expressed confidence in achieving breakthroughs on some key issues, including the additional capital requirements for banks deemed “too big to fail”.
Reporting by Australian bureau; Editing by Paul Tait and Richard Borsuk