G20 to focus on global growth, eurozone crisis

Updated: 2012-06-07 03:24

By Tan Yingzi in Washington (China Daily)

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There is "overwhelming consensus" to focus on global economic growth at the upcoming Group of 20 summit in Mexico, heeding European leaders' calls to confront the ongoing debt crisis in the eurozone, a top aide to US President Barack Obama said on Tuesday.

Michael Froman, deputy national security adviser for international economic affairs, said leaders in the G20 bloc of the world's biggest industrialized and developing nations regard the June 18 to 19 summit as a deadline for Europe to devise a plan for finally quelling problems in the single-currency area.

Heads of European governments, spooked by fresh signs that a global slowdown may be coming, have urged G20 leaders to concentrate on spurring growth and creating jobs when they meet at the Mexican resort of Los Cabos in two weeks.

"There's an overwhelming consensus that the focus is on growth, the need for growth (and) the risks to growth around the world," Froman said in a panel discussion at the Center for Strategic and International Studies, a think tank in Washington, to preview the G20 summit.

"The eurozone crisis is the most significant threat to growth, but we see slowing growth in the developing economies," said Froman, who is Obama's lead negotiator at G20 events.

Froman spoke just hours after finance ministers and central bank chiefs from the G7 industrialized economies used an emergency conference call to urge Europe to take more aggressive action against the eurozone crisis, specifically with regard to Spain and Greece. The ongoing debt problems threaten a deep recession on the continent that would be felt worldwide.

Specifically, officials from the G7 — the US, Britain, Canada, France, Germany, Italy and Japan — agreed to coordinate the response to the European crisis by helping the Spanish and Greek governments get their public finances to a more sustainable level, beyond current austerity steps. "It serves as a useful, action-forcing event," the US official said.

In addition to concerns over Europe, emerging markets such as Brazil, China, India and South Africa have seen growth declining recently.

Froman said he didn't expect any new initiatives to come out of the summit. Most actions that are announced will be built on past frameworks and a previously discussed agenda for "rebalancing" the global economy, such as spurring domestic demand in countries that enjoy trade surpluses and pursuing market-driven rates for currency exchanges.

Some business leaders attending Tuesday's conference urged an active role for the private sector in kicking growth into higher gear.

"There's simply no solution to global growth if government and business don't work together, especially in three critical areas: developing deeper and more liquid capital markets, lowering barriers to trade, and protecting strong intellectual property rights," said Harold "Terry" McGraw, vice-chairman of the International Chamber of Commerce and chairman of the United States Council for International Business.

Contact the writer at tanyingzi@chinadailyusa.com