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Mortgage News You Can Use U.S., Allies Stress Growth Need at Summit
BOCA RATON, Fla. (AP) -- The United States and its major economic allies wrapped up a contentious economic summit Saturday with all countries agreeing on the importance of world economic growth but bickering over how to bring it about. "The focus ... from my point of view will continue to be growth and what we ministers can do to build support for higher growth in our domestic economies," Treasury Secretary John Snow said on the second and final day of talks. "We have had a growth gap, a growth deficit, for some time." Snow said he was emphasizing in his one-on-one discussions and in the group meetings alike that President Bush's tax cuts "have begun to have real effects in producing higher growth rates in our economy, and that will benefit the world economy." The other countries at the meeting view the Bush tax policy as a main culprit for America's soaring budget deficits, Snow and Federal Reserve Chairman Alan Greenspan were hosts for the discussions among the Group of Seven wealthy industrial countries -- the United States, Japan, Britain, France, Germany, Italy and Canada -- which were being held at a posh resort along Florida's Gold Coast. The main topics for the two days of meetings were how to handle the steep slide in the value of the dollar and America's soaring budget and trade deficits, which the other rich countries consider serious threats to future global growth. During the discussions, the United States stressed a need for flexibility in currency markets. Its justification was that the dollar's skid of 20 percent over the past year to record lows in recent weeks against the euro, the common currency of 12 European countries, and a smaller decline against the Japanese yen was starting to bolster exports of America's beleaguered manufacturing companies. The Bush administration is hoping that rising U.S. exports from a weaker dollar will halt a slide in manufacturing jobs, which has now reached 2.8 million over the 3 1/2 years of the administration and has become a staple in Democratic attacks on Bush's economic policies. European officials, however, had hoped to get the G-7 on record against excessive volatility as a way of stemming the dollar's decline against the euro, which Europe fears will jeopardize its own economic recovery by depressing sales of European manufacturers. Italian Finance Minister Giulio Tremonti suggested Saturday that a possible compromise between the U.S. and European positions might be for the G-7 to support greater flexibility in Asian currencies. That was a veiled criticism of practices in Japan, China and other Asian countries who conduct massive government interventions to keep the dollar from declining too much against their currencies. "The Europeans presented the possibility to introduce something (in the final G-7 communique) to increase the flexibility regarding Asian currencies," Tremonti told reporters. The G-7 group also discussed their joint efforts to choke off sources of terrorist financing and to bolster the reconstruction efforts in Iraq and Afghanistan, both devastated in the aftermath of U.S.-led invasions. Afghan Finance Minister Ashraf Ghani told reporters Saturday said that his country would be seeking pledges of another $28.5 billion in aid and reconstruction financing over the next seven years at a donors' conference of wealthy nations to be held in Berlin at the end of March. Hoping to deflect criticism about a budget deficit that the White House announced Monday will hit an all-time high of $521 billion, Snow stressed in a series of meetings with individual countries Friday the importance the administration attaches to achieving its goal of cutting the deficit in half over the next five years. The other message the administration was pushing was a belief that faster growth in other countries will do a lot to alleviate a U.S. trade deficit that also is at record levels. While the United States thought it had a commitment from Japan to lessen its own currency intervention, Japanese Finance Minister Sadakazu Tanigaki told reporters that his country intended to continue taking "appropriate steps" such as intervention when it felt such action was needed. Back to Original Article: Mortgage News You Can Use
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