April 9, 2014 / 1:00 PM / 4 years ago

U.S. urges Germany, other European nations to take deflation seriously

WASHINGTON, April 9 (Reuters) - The United States on Wednesday urged Germany and other European countries to take seriously the risk that Europe could slip into a dangerous spiral of falling wages and prices.

“The risk of deflation is something that has a lot of people concerned,” Treasury Secretary Jack Lew told U.S. broadcaster CNBC, urging Europe’s export-geared countries to do more to boost economic demand on the continent.

“Germany obviously is one of the surplus countries in Europe,” he said in an interview ahead of the spring meetings of the International Monetary Fund in Washington.

“It’s a good thing in Germany that in their new government they made a commitment to increase spending on infrastructure. This is a question of not if you take action but how (much) you turn the dial. We think that the risk of low demand and the risk of deflation is something that they need to be very alert to, and they need to take a little more (action), not a little less.” (Reporting by Jason Lange; Editing by Bernadette Baum)

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