G20 finance chiefs meet to discuss EU, US risks

Updated: 2012-11-05 16:44


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MEXICO CITY - Finance chiefs from the world's leading economies met here Sunday to discuss Europe's debt crisis and the US "fiscal cliff" of spending cuts and tax hikes.

The two-day meeting of the Group of Twenty (G20) finance ministers and central bank governors focused on the eurozone debt crisis, where Greece might be forced out of the single-currency bloc if its parliament does not approve new austerity measures this week.

Spain also faces pressure to seek a bailout package. Spanish Economy Minister Luis de Guindos outlined his government's reforms on labor and banking in order to cope with the country's unemployment rate, which has risen to 25 percent, but did not indicate his government would seek financial aid.

G20 financial chiefs also discussed risks of the "fiscal cliff" facing the United States.

Under the US Budget Control Act 2011, $600 billion in budget cuts and a tax increases will come into effect automatically on Jan 1, 2013, if Congress and the White House cannot reach agreement by late this month on reducing the budget deficit by $1.2 trillion over the next 10 years. This could affect the US economy and global growth.

Jose Angel Gurria, secretary general of the Organization for Economic Cooperation and Development, said on Saturday G20 members should urge the United States to avoid the fiscal cliff.

However, US Secretary of Treasure Timothy Geithner and European Central Bank Director Mario Draghi are not attending the meeting.

The G20 is composed of the world's leading economies and important emerging ones, including the United States, the European Union, China and India. This is the last time Mexico hosts such meeting before handing over its presidency to Russia in 2013.

In a Sunday press conference hours before the meeting, Mexican Finance Minister Jose Antonio called on the 20 governments to use their fiscal margin and coordinate fiscal policies in a bid to boost the crisis-ravaged global economy.

The Mexican minister said every country had to find, within their own restrictions and economic reality, the best public policy to generate growth.