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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: puborectalis who wrote (159105)	7/8/2001 11:58:19 PM
From: puborectalis	Respond to of 769670

O'Neill ain't no Robert Rubin.........."The G-7 meeting, which was called to prepare a summit conference on the global economy that will bring President George W. Bush and seven other leaders to Genoa, Italy, this month, opened with some acrimony after France and Germany took exception to Mr. O'Neill's call earlier this week for Europe and Japan to do more to reverse the world slowdown. . Mr. O'Neill said before leaving for Italy that the United States was doing its part but that Europe and Japan "need to play a locomotive role as well." On Saturday he explained that the train he envisioned should be powered by a "three-engine locomotive" that featured Europe and Japan working with the United States. . Finance Minister Hans Eichel of Germany dismissed as "nonsense" reports that his country would soon lapse into recession and said it was foolish to blame Europe for not doing enough when it was now the strongest among the three regional economic powers. But he welcomed Mr. O'Neill's upbeat prediction, saying a U.S. recovery "would be good news for all of us." . The French finance minister, Laurent Fabius, said Europe was growing more quickly than the United States for the first time in a decade and should not be blamed. "We have to look at the essentials, and there are two," Mr. Fabius said. "The main origin of the current downturn is the American slowdown and the rise in oil prices." . Mr. Fabius said the United States should look to its own problems, notably the high level of individual debt and record number of personal bankruptcies. He said the United States needed to show greater discipline in cultivating domestic savings at a time when the country is running the biggest balance-of-payments deficit ever. . In response, Mr. O'Neill expressed exasperation with comparisons of who was doing more to help the world economy. "We are not here to throw rocks at each other," he said. . Other U.S. officials noted that the Federal Reserve Board had cut short-term interest rates six times this year, by a total of 2.75 percentage points, and that Congress had recently passed a $1.35 trillion package of tax cuts. . In contrast, the European Central Bank has cut rates just once this year, by 0.25 percentage points, because it says that inflation remains a serious threat. And European governments have not accelerated plans for income tax cuts even though growth prospects have diminished steadily in recent months. . Several ministers said a critical factor in the global economy's health will be whether Japan's prime minister, Junichiro Koizumi, fulfills his promise to carry out banking and fiscal reforms to pull the world's second-largest economy out of a decade-long slump. . The soaring value of the dollar has been cited by U.S. exporters as another source of trouble, but the absence of central bankers at the G-7 meeting limited discussion about finding a new equilibrium for the world's major currencies. Europe's new single currency, the euro, dropped near its all-time low against the dollar last week - just over 83 cents. But Europeans at G-7 Talks See No Quick Recovery ROME Treasury Secretary Paul O'Neill said over the weekend that the United States was poised for a significant economic upturn later this year that should help revive the world economy, provided that Europe and Japan do their share to stave off recession. . At a meeting here of finance ministers from the world's Group of Seven leading industrial democracies, Mr. O'Neill said the United States, Europe and Japan must better coordinate policies to restore economic momentum at a time when all three regions have been suffering a downturn. . "We all agreed that growth in each of our economies is crucial to prosperity around the world," Mr. O'Neill said Saturday after five hours of discussion with his peers. . "We in the United States have taken strong measures in both fiscal and monetary policy to return our economy to a higher growth path," he said. "And I continue to believe that the prospects for long-term global prosperity are better now than at any time in our history." . Mr. O'Neill cited a sustained boom in housing starts and near-record sales of cars and light trucks as evidence that the United States is about to begin a new period of expansion. After seeing the U.S. growth rate fall to 1.2 percent from 5 percent last year, he said, the American economy should resume expanding by more than 3 percent early next year. . Several European finance ministers, however, said they did not share O'Neill's optimism. The chancellor of the Exchequer, Gordon Brown, said the global downturn had proved "more severe than expected" and that hopes for an early recovery might be premature, given the bleak forecasts for much of Europe and Japan. . Afterward, analysts remained skeptical about the prospects for any concerted, fresh policy action by Europe to contribute to a turnaround in global economic prospects. . The U.S. and European ministers openly disagreed before the meeting over who should be responsible for acting as the "locomotive" for the rebound. Frustration at the inability to directly influence persistently high energy prices was also evident. . As a result, little in what was said is likely to calm the nerves of increasingly volatile international financial markets - always mindful of the history of G-7 disharmony and investor angst. A public U.S.-Europe dispute about interest rate policy in 1987 has frequently been cited as a trigger for the stock market crash that year. . The G-7 meeting, which was called to prepare a summit conference on the global economy that will bring President George W. Bush and seven other leaders to Genoa, Italy, this month, opened with some acrimony after France and Germany took exception to Mr. O'Neill's call earlier this week for Europe and Japan to do more to reverse the world slowdown." .