US: G8 reaches broad consensus on growth vs deficit cuts

HUNTSVILLE, Ontario, June 25 Fri Jun 25, 2010 4:54pm EDT

HUNTSVILLE, Ontario, June 25 (Reuters) - Group of Eight leaders have agreed on the need to stay focused on immediate growth goals while tackling public finances "going forward", a senior U.S. official said on Friday.

"There is a broad consensus among the G8 leaders, a convergence of views, if you will, as they head into the G20, about how to maintain durable growth, while also reaffirming, of course, the common shared commitments to fiscal consolidation going forward," the official told reporters.

The official, briefing reporters on the sidelines of the G8 summit at a wooded lakeside resort north of Toronto, spoke on the condition of anonymity.

U.S. President Barack Obama has called on his partners in the broader G20, which gathers both advanced and fast-growing emerging economic powerhouses like China and India, to keep focused on growth to ensure a self-sustaining recovery.

This pits the United States against Europe, where a debt crisis sparked by Greece has prompted a drive for austerity in public finances that Washington fears is premature.

"The president reiterated his strong belief that we need to maintain durable growth in the global economy...(Obama) underscored that a part of a growth strategy includes fiscal consolidation and deficit reduction, particularly in the medium term," the official added. (Reporting by Alister Bull and Patricia Zengerle, editing by Peter Galloway)

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