US Treasury Secretary Timothy Geithner said on Thursday that the Group of 20 leaders’ summit should focus on both growth and fiscal responsibility to lay a foundation for stronger economic growth in the future.
In excerpts from an interview with BBC World News America, Geithner said that belt-tightening European countries needed to decide their own mix of policies, but were focused on the need for stronger growth.
“They (Europe) need to make the choice of what makes the best choice for their country — it’s going to differ across countries,” Geithner said. “We’re not in a position to figure out what the best mix of policies are, given what their politics are, that’s the choice they have to make. But our job is to make sure we’re all sitting there together, focused on this challenge of growth and confidence because growth and confidence are paramount.”
Geithner, who will participate in the G20 summit this weekend in Toronto, said member countries all agree on the need to restore fiscal responsibility and bring down deficits to sustainable levels, but said the bulk of that should come after growth resumes.
“We’ve laid out very ambitious plans for doing that as well, and those will start to take effect as they are everywhere as the economy recovers and growth (is) restored,” he said. “We’re in a very good position now of being able to deliver relatively strong growth rates to what we’re seeing in the other major economies, but I think the world understands now that the world, growth in the future around the world, can’t depend on the United States as much as it did in the past.”
Although Geithner has pressed the need for countries with fiscal capacity to keep spending to cement recovery, he said U.S. deficits were on track to decline “on a pace very rapid, very extreme relative to almost any other country around the world.”
He said low U.S. interest rates and the relative strength of the dollar were a sign of investor confidence in America’s ability to deliver a more sustainable fiscal position.
“Our deficit will fall dramatically as the economy recovers and as the emergency stimulus actions we put in place in crisis expire as they will,” Geithner said. “So I think we have a very strong commitment to a responsible fiscal path for the future and you see that confidence in how investors, American and global investors, are behaving every day.”
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