Lew and Osborne urge reforms before G20 summit | Business| Economy and finance news from a German perspective | DW | 09.02.2015
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Lew and Osborne urge reforms before G20 summit

As finance ministers and central bankers descend on Istanbul, Turkey, for a G20 summit, officials from the US and Great Britain have called on countries to coordinate their strategies for global growth.

Economic reforms and "forceful" monetary and fiscal policies will be crucial to sustaining global growth against a backdrop of a number of geopolitical challenges, top finance officials from the United States and Great Britain wrote in a joint op-ed for the Wall Street Journal published late Sunday.

The commentary by Jacob Lew, the US treasury secretary, and George Osborne, the British chancellor of the exchequer, came a day before finance ministers and central bankers gather in Istanbul, Turkey, for a G20 meeting where sluggish growth in Europe and a Greek push to refinance its debt are likely to take center stage.

Lew and Osborne said governments around the world should work together to boost growth and reduce their fiscal deficits, but added that the burden of doing so should be shared fairly.

"Our message at the G20 is this: Governments must use the full set of tools they have at their disposal to support their economies and realize the collective G20 objective of strong, sustainable and balanced global growth," Lew and Osborne wrote.

Europe not doing enough

Last week, Lew said the US would not be the only country to prop up the global economy as it steadily recovers from years of lackluster performance after the 2007-2009 financial crisis. A senior US official also reportedly told the Reuters news agency that Europe was not doing enough to prevent economic turbulence on the Continent from spreading.

"The entire Continent must do more to support growth and jobs, recognizing that countries have varying degrees of fiscal space," Lew and Osborne wrote.

The two officials also said it was important for Greece to carry on with its reforms while working closely with its European and international partners.

"We share a common interest with our European partners in seeing Greece sustain and build upon its hard-fought progress on reforms," they said. "It is important that Greece implement a credible and comprehensive approach to reform, recovery and economic growth."

Infrastructure and education

Lew and Osborne emphasized that in order to lift the standard of living and boost competitiveness, reforms that balanced reductions in fiscal deficits and investments in infrastructure and education would be crucial.

They also said central banks should continue to prop up their countries' economies when necessary with "forceful monetary policy actions" that encourage business and household spending and fend off deflation, but noted that central banks could not do the job alone.

With some countries recovering from the financial crisis more quickly than others, there is a heightened sense of urgency at this year's G20 meeting for leaders to make good on a pledge made last year in Brisbane, Australia - called the Brisbane Action Plan - to create millions of new jobs and increase the sizes of their economies.

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