Wednesday

22nd Feb 2017

US to chide Germany on eurozone growth at G7 meeting

US treasury secretary Jack Lew will repeat calls for Germany to stimulate demand in order to drag the eurozone out of recession, according to US government sources.

Speaking with reporters in Washington on Wednesday (8 May) ahead of the meeting of G7 finance ministers in the UK on Friday (10 May), a senior US Treasury official commented that Lew's main message would be to urge the eurozone to "reinvigorate growth and domestic demand."

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

  • Wolfgang Shaeuble (l) has in the past said that Germany does not want to be 'graded' by the US (Photo: Joerg Rueger/German ministry of finance)

The official added that "Europe's surplus countries hold the key" to kickstarting the eurozone economy and increasing employment, highlighting the reduction of Germany's 7 percent export surplus.

Meanwhile, the eurozone should "recalibrate fiscal consolidation programmes" and avoid "excessively sharp consolidation."

European leaders in the G7 are keen to focus the informal discussions on automatic exchange of information on foreign-held bank accounts as part of wider talks on combating tax evasion and avoidance.

The US, meanwhile, has made it clear that its priority is bolstering Europe's fragile economy.

The US stance is likely to meet resistance from the German government, which is reluctant to increase wages and stimulate domestic spending, preferring instead to keep wages low to encourage manufacturing and exports.

But Berlin is under pressure to reduce its 7 percent export surplus. In April, Lew used his first trip to Berlin as Treasury Secretary to urge counterpart Wolfgang Schaueble to put in place measures to stimulate consumer spending.

For his part, Schaueble commented that neither the US or Germany should try to give "lessons" or "grades" to each other.

Last week the EU's Economic Affairs Commissioner Olli Rehn, regarded as one of the bloc's leading hawks on deficit cutting, indicated that France and Spain would be given an additional two years to reduce their deficits to the 3 percent threshold laid out in the EU's budget rules.

Rehn has also in recent weeks sought to underline that the pace of deficit reduction will slow in 2013 to an average of 0.75 percent of GDP, down from 1.75 percent in 2012.

Greece and creditors break bailout deadlock

Athens agreed on budget cuts worth up to €3.6 billion and extracted some concessions from creditors, but the IMF warned the package might not be enough.

MEPs approve Canada trade deal amid protest

Amid protests in front of the European Parliament's Strasbourg building and after heated debate among MEPs, the landmark trade deal with Canada was approved with a comfortable majority.

News in Brief

  1. Romanian parliament buries controversial corruption decree
  2. Dozens drown off Libyan coast
  3. EU ministers approve anti-tax avoidance directive
  4. Poland rejects EU criticism of court changes
  5. German nationalist leader met with Putin allies in Moscow
  6. German housing market overheated, says Bundesbank
  7. France invites three EU leaders for Versailles summit in March
  8. Greece agrees on new bailout reforms

Stakeholders' Highlights

  1. Martens CentreEU and US Migration Policies Compared: Join the Debate on February 28th
  2. Swedish EnterprisesTechnology and Data Flows - Shaping the Society of Tomorrow
  3. UNICEFNearly 1.4 Million Children at Risk of Death as Famine Looms Across Africa and Yemen
  4. Malta EU 2017End of Roaming Fees: Council Reaches Agreement on Wholesale Caps
  5. Nordic Council of MinistersNordic Innovation House Opens in New York to Help Startups Access US Market
  6. Centre Maurits CoppietersMinorities and Migrations
  7. Salzburg Global SeminarThe Child in the City: Health, Parks and Play
  8. UNICEFNumber of Ukrainian Children Needing Aid Nearly Doubles to 1 Million Over the Past Year
  9. Centre Maurits CoppietersThe Situation of Refugee Women in Europe
  10. Salzburg Global SeminarToward a Shared Culture of Health: Charting the Patient-Clinician Relationship
  11. European Free AllianceAustria Should Preserve & Promote Bilingual and Multinational Carinthia
  12. Martens CentreShow Your Love for Democracy! Take Part in Our Contest: "If It's Broken, Let's Fix It"

Latest News

  1. Should Europeans spend more on defence?
  2. Dieselgate: EU disappointed with VW's treatment of customers
  3. French police raid Le Pen's party office
  4. The Armenia-Azerbaijan war: A refugee's story
  5. Greece and creditors break bailout deadlock
  6. Internal EU report exposes Libya turmoil
  7. EU commissioner condemns 'delay' in post-Dieselgate reform
  8. Sweden fights back as foreign leaders make up bad news