US: world cannot afford European economic 'lost decade'

[WASHINGTON] The United States urged European governments to do more to stoke growth Wednesday, warning that monetary easing by the European Central Bank is not enough to avoid a deeper slump.

"The world cannot afford a European lost decade," US Treasury Secretary Jacob Lew said, criticizing "status quo policies" in the continent.

"The ECB has taken forceful steps to support the economy through accommodative monetary policy," Mr Lew said, according to the text of a speech to be delivered later Wednesday.

"But as recent economic performance suggests, this alone has not proven sufficient to restore healthy growth. Resolute action by national authorities and other European bodies is needed to reduce the risk that the region could fall into a deeper slump."

Mr Lew added that the world is relying too much on the United States to drive a global economic recovery.

"The global economy cannot prosper broadly relying on the United States to be the importer of first and last resort, nor can it rely on the United States to grow fast enough to make up for weak growth in major world economies," he said in the speech.

"The world is stronger if we all take steps to bolster domestic demand." Mr Lew's comments came ahead of the meeting of G20 leaders in Brisbane, Australia this weekend. Sluggish global growth and backsliding by the eurozone economy are expected to be key topics in the summit.

AFP