Australia's Swan Blasts 'Mindless' European Austerity
Australian Treasurer Wayne Swan has blasted "mindless austerity" in Europe as a brake on global growth and warned Asia "cannot continue to carry the load".
Swan said in an interview published Wednesday that developed nations needed to do more to drive the global economy, including boosting government spending.
"We need developed economies to take the handbrake off growth that is coming from mindless austerity," he told the Wall Street Journal ahead of a meeting this week of top world finance chiefs in Washington.
"Asia cannot continue to carry the load, to do all the heavy lifting in the global economy," said Swan, who was Euromoney's Finance Minister of the Year in 2011 as Australia came through the global financial crisis virtually unscathed.
"We need to see a greater effort in terms of policies that promote growth out of the developed economies in Europe."
The EU recession's impact on world economic growth is expected to be a central topic in Washington, where finance ministers and central bank officials of the International Monetary Fund, World Bank and G20 meet on Thursday.
Swan said new sources of growth needed to "come from developed economies, particularly Europe, but at the moment fiscal austerity there is a huge brake".
Currency devaluations as countries seek to reflate their economies by pumping out money are expected to be the second major issue at the talks following Japan's controversial decision to boost liquidity and fight deflation.
The move, which the Bank of Japan is targeting by doubling the money supply and aggressively increasing asset purchases, has drawn criticism from countries including South Korea that its exporters are disadvantaged as the yen tumbles.
Swan said he had a "lot of sympathy" for the argument, noting his own struggles with the stubbornly ascendant Australian dollar, which is crippling local manufacturing and other industries.
GM Holden, the Australian offshoot of U.S. automaker General Motors, this month blamed Japanese monetary policy for lagging car sales that have forced it to axe 500 jobs.
Source: Agence France Presse
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