US Warns Europe Against Relying Much on Exports
World Economy

US Warns Europe Against Relying Much on Exports

The United States warned Europe  against relying too much on exports for growth and urged officials to make more use of fiscal policy, saying stronger demand in Germany was essential.
In a report to Congress, the US Treasury Department gave a preview of the positions it will press on foreign policymakers during next week’s International Monetary Fund meetings in Washington, RTRS reported.
For one, America is wary of the eurozone’s rising current account surplus, a broad measure of cross-border flows of goods and capital. The Treasury noted the European Central Bank was taking forceful measures to help the region’s economy, policies that depress the value of the euro and make exports from the currency bloc more competitive.
Adding taxpayer money and more economic reforms to Europe’s policy mix “would avoid the risk that growth becomes excessively reliant on the external sector,” the Treasury said.
While growth in Europe has shown some recent signs of picking up, the region remains the sick man of the global economy.
Germany’s export-driven economy has powered much of the increase in the region’s current account surplus. The Treasury said stronger demand in Germany, which includes spending consumer goods and investments, was “absolutely essential.”

Washington also called China’s currency “significantly undervalued,” but said Beijing appeared to be less heavy-handed in currency interventions than in the past, and had recently sold foreign currency to prop up the yuan’s value.
The semiannual report examines the economic and foreign exchange policies of major US trading partners.
It did not formally label any country a currency manipulator, and has not done so in any report since 1994.
The Treasury did have some harsh words for South Korea, calling on it to minimize currency interventions. The Treasury said it has “intensified” its engagement with Seoul on currency issues.
The United States also appeared more concerned about prospects for Japan, warning officials to avoid overdoing fiscal consolidation and relying too much on monetary policy as the government continues radical measures to shock the economy out of decades of deflation.
“Over-reliance on monetary policy ... will put Japan’s recovery and escape from deflation at risk and could generate negative spillovers,” the Treasury said.


Short URL : http://goo.gl/3bFwn9

You can also read ...

Cyber threats are ever-evolving.
The White House released a report that found that the economic...
Global Investors Target Zimbabwe Energy Sector
Zimbabwe has become a magnet for billionaire global firms such...
BSP said the planned RRR cuts are part of the bank’s financial market reforms.
The Bangko Sentral ng Pilipinas said it was reducing banks’...
FAO regional representative Julio Berdegue (R), and the deputy regional representative Eve Crowley.
Identifying territories where rural poverty is most entrenched...
Asean Labor Flows Hit a Wall
Tighter restrictions on foreign labor in Malaysia and Thailand...
Baby-boomers will start turning 75 or older in 2022, which is expected to trigger a surge in health care and nursing care costs.
Amid stalling inflation and ballooning government spending,...
The country’s GDP grew by 3.2% in 2017 but will  edge down in the coming years.
A report by the International Monetary Fund showed Sunday that...
Lagarde Backs Creation of European Monetary Fund
International Monetary Fund chief Christine Lagarde has no...