OECD Chief says G20 should urge U.S. resolution of fiscal cliff

MEXICO CITY Sat Nov 3, 2012 7:19pm EDT

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MEXICO CITY (Reuters) - The Group of 20 leading economies should appeal to the United States to avert automatic spending cuts and tax hikes that threaten U.S. and world growth, the head of the Organization for Economic Co-operation and Development said on Saturday.

Jose Angel Gurria also said he was optimistic that the U.S. Congress would strike a deal to avoid the so-called fiscal cliff of $600 billion in spending cuts and higher taxes due to kick in on January 1.

"I still believe it is not going to be applied," Gurria said in an interview ahead of the G-20 meeting in Mexico City, but added officials should urge the United States to take action in a communiqué set to be released Monday.

Gurria, who has been at the helm of the OECD since 2006, also said Europe should welcome any Spanish bailout request.

"If Spain decides to go, we should issue very strong signals that it would be welcome and that the system would be prepared to support one of the family," he said, referring to Europe.

Spain has been the main focus of the three-year-old euro zone debt crisis for the last nine months and has already obtained a credit line of up to 100 billion euros ($128.45 billion) for its banks.

The country has been under pressure to request a bailout, through the European rescue fund, the European Stability Mechanism, which would trigger bond buying by the central bank to stabilize borrowing costs.

But so far Spanish prime minister Mario Rajoy has demurred.

The G20 meeting comes on the heels of talks among many of the same officials at the International Monetary Fund autumn meetings in Tokyo last month.

Policymakers then backed a series policy reforms aimed at pressuring the United States and Europe to tackle their debt woes.

Gurria has served as Minister of both Foreign Affairs and Finance for Mexico.

($1 = 0.7785 euros)

(Reporting by Alexandra Alper; Editing by Diane Craft)

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Comments (3)
Harry079 wrote:
They can URGE all they want. Don’t expect Congress to do anything before then end of the year.

Nov 03, 2012 10:43pm EDT  --  Report as abuse
lucky12345 wrote:
Power to the people, down with all those Rich folks who run banks and oil companies!!! WE the little people want our FAIR share of your money so give it to us NOW…

Nov 04, 2012 7:05am EST  --  Report as abuse
r.u.crazy wrote:
The U.S. needs spending cuts and needed them a long time ago. $600 billion is a drop in the bucket compared to the $16 trillion of debt. It’s time to drop foreign aid like a bad habit and tell the rest of the world to get a job, NO more handouts.

Nov 04, 2012 8:11am EST  --  Report as abuse
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