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6/7/10

Europe and US clash over timing of austerity measures

The weekend's meeting of G20 finance ministers and central bankers saw heated exchanges between US and European representatives, with division centering on the speed at which government budget deficits should be reduced.

US treasury secretary Timothy Geithner argued the case for fiscal consolidation over the "medium term," while Europeans, rattled by the region's ongoing debt crisis, called for faster cutbacks. "Stronger domestic demand in Japan and in the European surplus countries" is needed, Mr Geithner told reporters in Busan, South Korea, on Saturday (5 June). European representatives said greater emphasis should be placed on restoring healthy public finances. "For the vast majority, addressing finances, budget consolidation, is priority No. 1," said French finance minister Christine Lagarde.

Translating words into action, German cabinet ministers appeared close on Sunday evening to agreeing on changes to welfare provision and a big reduction in the size of its armed forces.

For more EUobserver / Europe and US clash over timing of austerity measures

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