By Anna Yukhananov
WASHINGTON Nov 2 Europe's financial crisis
remains the biggest hurdle to global economic recovery and will
be in focus at a meeting of world finance chiefs in Mexico City
this weekend, a senior U.S. Treasury official said on Friday.
"Recognizing that Europe remains the strongest headwind to
global growth, there will be considerable interest among the G20
on the European crisis response," the official said.
The comments contrast with those from some other members of
the Group of 20 leading economies, who said the United States'
own fiscal problems will loom largest at the G20 meetings.
Unless the fractious U.S. Congress can strike a deal, a slew
of U.S. spending cuts and higher taxes is due to kick in on
Jan. 1, sucking $600 billion out of the U.S. economy next year
and threatening global growth.
The senior U.S. Treasury official, who spoke with reporters
on condition of anonymity, also said the meetings in Mexico City
will focus on what further steps developing countries should
take to strengthen domestic demand and loosen exchange rate
policy, particularly China.
"China for example still has further to go in achieving a
market-oriented exchange rate and adjusting its imbalances in a
sustained manner," the official said. But the official added
that China has made progress in allowing the yuan to appreciate
by over 11 percent in real terms against the dollar since 2009.
The G20 meeting comes on the heels of talks among many of
the same officials at the International Monetary Fund meetings
in Tokyo last month. Policymakers then backed a policy agenda
aimed at pressuring the United States and Europe to tackle their
This time around, G20 officials meet just before the U.S.
presidential election and days ahead of China's Communist Party
congress. Several top finance ministers and central bankers plan
to skip the meetings in Mexico City - including U.S. Treasury
Secretary Timothy Geithner - and most people involved in the
talks expect no major agreements.