IMF chief tells economic powers to focus on growth, criticizes U.S. sequester
WASHINGTON — The head of the International Monetary Fund said the United States, Europe, Japan and China all need to make adjustments to their economic policies to boost a still-struggling global economy.
IMF Managing Director Christine Lagarde says the United States and many countries in Europe need to focus more on growth and less on trimming budget balances this year. She said there was a critical need for policies focused on spurring jobs. Lagarde told a news conference on Thursday that “we need growth, first and foremost.”
Lagarde spoke to reporters to preview upcoming discussions among finance ministers and central bank governors of the world's 20 major economies plus the spring meetings of the 188-nation IMF and its sister lending institution, the World Bank.
Earlier this week, the IMF lowered its outlook for the world economy this year, predicting that government spending cuts would slow U.S. growth and keep the 17-nation area that uses the euro currency in recession.
Officials of the Group of 20, which includes Treasury Secretary Jacob Lew and Federal Reserve Chairman Ben Bernanke, were scheduled to begin their discussions over a working dinner Thursday night and wrap up Friday with the issuance of a joint communique. The G-20 is composed of the world's major developed countries such as the United States, Japan and Germany and fast-growing developing nations including China, Brazil and India.
That joint statement was expected to repeat a pledge the group made at their last meeting in February that they would avoid using competitive currency devaluations to gain advantages in trade.
Lew, previewing the U.S. objectives going into the meetings, said that he would press Europe to do more to support growth and would maintain pressure on Japan and China to avoid lowering the value of their currencies to boost their exports at the expense of the United States and other countries.
Lew said it was important that G-20 nations “avoid a downward spiral of ‘beggar thy neighbor' policies,” the type of destructive trade competition that worsened the Great Depression in the 1930s.
In her comments, Lagarde talked about the dangers of overemphasizing deficit reduction with growth still fragile. She said the United States had avoided the “fiscal cliff” of across-the-board tax hikes and spending cuts at the beginning of this year that could have derailed the U.S. economy but had made a policy error by allowing $85 billion in across-the-board spending cuts, known as a sequester, to take effect on March 1.
Lagarde said the United States needed to pursue “better quality” deficit reductions with less impact coming in the near-term.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Nations urged to follow U.S. example on Ebola
- U.S., EU sting Russian energy sector in sanctions
- Landmark Ukraine, EU deal ratified
- Poll: ‘No’ leads ‘yes’ in a close Scotland vote on independence from United Kingdom
- Convict’s wish for assisted suicide OK’d in Belgium
- Scientists snatch giant opportunity
- Aid to Ukraine uncertain as its leader visits U.S.
- Russia’s business world rattled by arrest of oil tycoon Yevtushenkov