European crisis blocking global recovery, says US treasury official


Europe’s financial crisis remains the biggest hurdle to global economic recovery and will be in focus at a meeting of world finance chiefs in Mexico City this weekend, a senior US treasury official said yesterday.

“Recognising that Europe remains the strongest headwind to global growth, there will be considerable interest among the G20 on the European crisis response,” the official said.

The comments contrast with those from some other members of the Group of 20 leading economies, who said the United States’ own fiscal problems would loom largest at the G20 meetings.

Unless the fractious US Congress can strike a deal, a slew of US spending cuts and higher taxes is due to kick in on January 1st, sucking $600 billion (€467 billion) out of the US economy next year and threatening global growth. – (Reuters)