WASHINGTON May 15 Greater currency flexibility
from emerging economies is needed to spur global growth, a
senior U.S. Treasury official said on Wednesday.
"Global recovery has been held back by a lack of demand
growth in many of the major advanced economies, and by
resistance in many emerging economies to moving more quickly
toward the currency flexibility needed for a durable
rebalancing," Lael Brainard, Treasury undersecretary for
international affairs, said during a conference.
The United States has long pressed China to let the yuan
rise more quickly in order to boost demand in the world's
second-largest economy. It is also calling on the European Union
to slow down government austerity measures as the region enters
a sixth consecutive quarter of contraction.
"You cannot cut your way to growth," Brainard said. "Europe
has established a lot of credibility on the reform agenda...
"(But) there is capacity within the euro area, simply
through boosting the contribution of private demand in surplus
economies, to help ease the adjustment, which has really come
through compression of demand in some of the peripheral
Brainard was speaking during a conference of the Bretton
Woods Committee, which works on strengthening the IMF and World
Bank, known as the Bretton Woods institutions for the place in
which they were founded.