US advice clashes with Britain’s Budget
By politics.co.uk staff
US treasury secretary Tim Geithner’s advice to Europe and Japan to keep spending appeared to signal disapproval of Britain’s emergency Budget cuts, as violence erupted at the G20 summit in Canada.
A day after the G8 met the G20 saw over 100 people arrested on the streets of Toronto, after demonstrators wearing black clothing challenged police by smashing windows and setting fire to police vehicles.
Inside the summit compound world leaders were discussing how best to maintain economic growth.
Mr Geithner’s clear argument in favour of maintaining spending levels to avoid a double-dip recession clashed with the department budget cuts worth 25% in Britain.
“This summit must be fundamentally about growth,” he said. “And our challenge as the G20 is to act together to strengthen the prospects for growth.”
Brazil has also joined the US in warning of the danger of focusing on cutting deficits and not actively encouraging growth.
“If the cuts take place in advanced countries it is worse,” Brazilian finance minister Guido Mantega said.
“Because instead of stimulating growth they pay more attention to fiscal adjustments, and if they are exporters they will be reforming at our cost.”
David Cameron met with US president Barack Obama yesterday on Marine One, where the pair acknowledged the need to secure strong, balanced and sustainable growth in the world economy, Downing Street said.
