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EU, US at odds ahead of London G20 summit

(Xinhua)
Updated: 2009-03-11 11:36

BRUSSELS -- With less than one month to go before the Group of 20 (G20) summit in London on how to tackle the world financial crisis and economic downturn, the European Union (EU) and the United States remain at odds on what can be achieved.

Related readings:  China ready to work with others at G20 - FM  China expects 'positive' results from G20 summit  Obama hosts Brown to compose G20 song sheet  European leaders eye G20 boost

While the EU is still pushing hard for tougher financial regulations at  the global level, Washington wants to play it down by focusing on the real economy and pressing European countries to spend more on their national stimulus efforts.

In an interview with the Financial Times published on Monday, US President Barack Obama's top economic adviser Lawrence Summers urged world leaders to pump more public money into the economy in a coordinated effort to boost demand and lift the world out of recession.

"The right macro-economic focus for the G20 is on global demand and the world needs more global demand," Summers was quoted as saying.

The Financial Times said his comments make it clear that Washington wants industrialized nations to share the responsibility for engineering a global demand-led recovery.

Summers is obviously targeting the EU since the 27-nation bloc has not spent as much as others to stimulate its economy, according to some critics.

The International Monetary Fund (IMF) said in a report last week that only the United States, Saudi Arabia, China, Spain and Australia are on track to introduce fiscal stimulus packages equivalent to 2 percent of their gross domestic product (GDP) this year.

Although EU leaders agreed to an economic stimulus plan worth 200 billion euros ($256 billion) at a summit in December, the sum was only equivalent to 1.5 percent of the bloc's GDP, the IMF said.

It warned that US stimulus efforts would be less effective if other countries do not follow it.

But Washington's call has apparently been rejected by the EU.

Germany is "not discussing any additional measures" to boost its economy, German Finance Minister Peer Steinbrueck told reporters on Monday on arrival at the EU headquarters in Brussels for a regular meeting with his eurozone counterparts.

Steinbrueck's stand won support from his colleagues in the 16-nation eurozone.

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