jack lew treasury secretary berlin germany wolfgang schaeuble
Michael Sohn/AP U.S. Treasury Secretary Jacob J. Lew, right, shake hands with Germany's Finance Minister Wolfgang Schaeuble prior to a press conference Tuesday in Berlin.
By Anna Yukhananov

Berlin and Paris -- U.S. Treasury Secretary Jack Lew on Tuesday urged countries with a trade surplus to boost domestic consumption, underlining a divergence of views between Washington and Europe's economic powerhouse Germany on austerity policies.

On his first official visit to Europe, Lew stressed the need to strike the right balance between efforts to support growth while improving strained public finances -- a stance that found support in particular from France.

Germany has the eurozone's biggest trade surplus and has in the past rebuffed pressure to shift policy to bring about a rebalancing of commercial flows in Europe.


"The driver for economic growth has got to be consumer demand ... policies to help to encourage consumer demand in countries that have the capacity would be helpful," he said at a news conference with German Finance Minister Wolfgang Schaeuble.

Lew has pressed European officials to moderate austerity measures in order to boost growth, and called on surplus countries like Germany to boost their consumption to help pull the continent out of the doldrums.

A U.S. Treasury official told reporters traveling with Lew from Berlin to his next stop in Paris that the United States and Germany disagreed on the extent to which budget austerity can slow economic growth.

But the official, speaking on condition of anonymity, said Europe was aware of the need to boost demand and combat persistent unemployment, adding that talks between the two officials had focused on areas of agreement.

For their part, Schaeuble and Lew publicly played down any differences in their views, with the German arguing that growth and budget consolidation weren't mutually exclusive.

"Nobody, including in Europe, sees this contrast between fiscal consolidation and growth. Our common position is of growth-friendly consolidation or of sustainable growth, however you want to call it," Schaeuble told reporters.

Striking the Right Balance

After meeting French Finance Minister Pierre Moscovici in Paris, Lew said the two were on the same wavelength about reviving growth and tackling budget deficits.

With its own finances highly strained and growth faltering, France has been more open than Germany to potential policy tweaks that would boost growth while improving public finances.

"Our view is that there needs to be a balanced approach between growth and fiscal consolidation," Lew said in a joint news conference with Moscovici.

"All tools need to be considered. Our encouragement is to use the leverage that is appropriate in Europe."

Germany, Europe's biggest economy, argues that budgetary rigor isn't incompatible with growth, and is necessary to convince markets that governments are sticking to their spending diets in order to avoid another sovereign debt crisis

Lew stressed the United States wanted a strong Europe.

"As we continue to address many of our long-term challenges, our economy's strength remains sensitive to events beyond our shores. We have an immense stake in a prosperous Europe," he said.

Later, aboard Lew's plane, the U.S. Treasury official told reporters there was a pragmatic shift underway in Europe that put less emphasis on budget austerity and more on structural economic reforms.

"We have made the case that, much as we have in the United States responded to the economic cycle and what it takes to keep growth going, Europeans need to look as well what they can do to generate more demand in their economy," Lew said in an interview with National Public Radio.

Lew is met European Union officials in Brussels and European Central Bank President Mario Draghi in Frankfurt on Monday. He is a budget expert, and close confidant to U.S. President Barack Obama, which may help in his dealings with European officials about deficits and debt.


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aromaremedies

We can no longer say that reigning in purchases for things we don't need is a bad thing. Take a look at the cheap, trinket types of things people mindlessly buy. People also shop to relieve boredom or to get a quick thrill from a shiny new object rather than for something people truly need. Most of these items are Made in China cheaply made goods. People are realizing they can do with less. They can wear the clothes they have more seasons than they thought, they really do not need another , and another and another..the things that people really need like a new bathroom, or a new refrigerator, or a new fence or well made front door etc. these things are so prohibitively high priced and unaffordable that people don't buy but instead substitute with small cheapo things for a quick feeling. Now that that has stopped to some extent, Wall St. is interpreting this healthy new paradigm as something wrong and bad when it is actually people coming to their senses. We are becoming more East, Zen and minimalist in our lifestyles as the East becomes more materialistic and shopaholic, ironically or actually as a result of their new wealth

April 10 2013 at 12:38 AM Report abuse rate up rate down Reply
aromaremedies

We need to accept and even welcome that there is a new normal afoot whereby people are realizing THEY DONT NEED ALL THIS STUFF! If there is a lowering of purchases that is a good thing because people shop mindlessly for a lot of trinkets and things they dont really need. If people are doing with less for things they don't really need why is that bad? It is better for the preservation of the environment as well, big time. People should buy things they need not stupid mindless purchases that are cheaply made and end in in landfills within a year

April 10 2013 at 12:27 AM Report abuse rate up rate down Reply
aromaremedies

We need to accept and even welcome that there is a new normal afoot whereby people are realizing THEY DONT NEED ALL THIS STUFF! If there is a lowering of purchases that is a good thing because people shop mindlessly for a lot of trinkets and things they dont really need. If people are doing with less for things they don't really need why is that bad? It is better for the preservation of the environment as well, big time. People should buy things they need not stupid mindless purchases that are cheaply made and end in in landfills within a year

April 10 2013 at 12:21 AM Report abuse rate up rate down Reply