The world's top economic powers urged the United States to break its stalemate over the nation's debt ceiling and budget, calling the standoff one of the world's chief immediate economic risks.
During a meeting in Washington on Friday, members of the Group of 20 grilled Treasury Secretary Jack Lew and Federal Reserve Chairman Ben Bernanke about U.S. economic policy, with Lew breaking from the session early to continue negotiations with Congress.
Although the world financial leaders said they remain confident that the government shutdown will end soon, that the U.S. debt ceiling will be raised and that a debt default will be avoided, they also went on record with their concerns.
"The U.S. needs to take urgent action," the group said in a communique that pointed to these "short-term fiscal uncertainties" and the coming shift of Fed stimulus policy as "downside risks" facing a slow global recovery.
Products of careful diplomatic wording, G20 statements are never overly harsh. But the decision this time to cite a particular country and issue shows that the U.S. budget stalemate is considered to be of global significance. Recent communiques have pushed euro-zone countries on their financial problems and pressured China to loosen controls on its currency.
In this case, however, the Obama administration was eager for just such a statement, which adds a dose of international pressure as the White House and Congress continue negotiations.
Still, others echoed the point. "No one benefits from delay," said Russian Finance Minister Anton Siluanov, who chaired the session of major nations, including China, Japan, much of Europe and others. "It is making a negative impact on all the countries involved. So we are hoping that the U.S. administration and the U.S. Congress will resolve this situation, and the uncertainty we have today will disappear."
Siluanov said that U.S. officials in the meeting left other nations with the belief that there would be a resolution by Thursday, when the Treasury estimates the country will hit its debt limit and not be able to borrow money to pay its bills, possibly including payments on U.S. Treasury bonds.
An American official familiar with the deliberations said Lew told the group that there was still a "bumpy, noisy path" ahead before any deal is reached.
The uncertain direction of U.S. policy has become an unexpected focus at the meetings in Washington this week of the International Monetary Fund and World Bank. The heads of both organizations also urged the United States to fix its problems and said the prospect of the Fed tightening monetary policy was already being felt around the world in the form of higher interest rates that developing countries can ill afford.
There is broad acknowledgment that the stimulus policy will have to shift as the U.S. economy strengthens. But the G20 urged its biggest member nation to be careful as it changes gears. The Fed's loose money policies have led to record investments in bonds and stocks in developing nations — which could be withdrawn if the Fed tapers its bond-buying and could upend local markets.
The group said that decisions about monetary policy need "to be carefully calibrated and clearly communicated" in an effort limit the "spillovers" around the world. -- The Washington Post
The Washington Post
Sat Oct 12 2013
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.