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Europe, US converging on "growth-friendly" budget cuts

Other News Materials 26 June 2010 04:26
The European Union and United States appeared to put their economic differences aside on Friday as they agreed that any budget cuts they bring in should not damage growth.
Europe, US converging on "growth-friendly" budget cuts

The European Union and United States appeared to put their economic differences aside on Friday as they agreed that any budget cuts they bring in should not damage growth, diplomats at a Group of Eight leading nations (G8) summit said.

Ahead of the meeting in Canada, diplomats said that a split had emerged, with EU states pushing for deep budget cuts and the US insisting that the priority should be to boost growth, DPA reported.

But a European diplomat at the summit said that "rumours of some kind of clash ... are greatly exaggerated," and that "convergence came quite easily that growth and fiscal consolidation are not mutually exclusive if the time path and values are right."

A US diplomat used almost the same words, saying that budget cuts and growth stimulation "are not exclusive."

The leaders of the group of 20 (G20) top developed and developing economies are set to meet Saturday in Toronto, immediately after the G8 summit, to discuss the way out of the economic crisis.

That meeting is expected to call for a balance between budget cuts and growth.

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