Treasury opposes public funds for housing relief

WASHINGTON (Reuters) - U.S. Treasury Under Secretary David McCormick said on Wednesday that he hasn't seen any coordinated drive by European G7 members to use public funds to help stabilize housing and financial markets.

McCormick told reporters ahead of a Friday meeting of Group of Seven industrialized nations finance ministers the United States would not back the use of taxpayer money for that purpose.

"In terms of an injection of public money in a very significant way into this ... we're not at all certain that that would make sense or would even have the desired public policy outcome," he said, noting that only 2 percent of U.S. mortgages were actually in foreclosure.

"We think a very significant injection of public funding that essentially bails out speculators would not be a good use of taxpayer money and is frankly not something that we sense most Americans would support," McCormick said.

On other topics, McCormick praised China's actions in letting its yuan currency appreciate in recent months but said its value needs to rise further in order to help shrink global imbalances caused by China's huge trade surpluses.

(Reporting by Glenn Somerville; Editing by James Dalgleish)