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 While lauding the strength of the U.S. economy, Lew said more work
was needed to achieve faster and more balanced economic growth and
to boost demand.
"The United States continues to be a source of strength in the
global economy," Lew said in remarks with his Australian counterpart
Joe Hockey.
"But overall, the global economy continues to underperform. This is
particularly true in the Euro Area and Japan, while a number of
emerging market economies are also slowing," Lew said at the start
of a G20 meeting of finance ministers and central bankers in the
northern Australian city of Cairns.
His call is likely to get a cool reception from the Europeans.
Speaking during a stopover in Hong Kong, German Finance Minister
Wolfgang Schauble said his country's economy was robust and that it
was important for Europe to stick with the tough path of fiscal
reform.
"We are in the global economy and in Europe in a situation, in which
we seem to have too much liquidity and too much public debt,"
Schauble told reporters.
PRESSURE ON BERLIN, TOKYO
"That means the room to stimulate growth from the demand side and
the monetary-policy side is - with regional differences - small,"
the German minister said.
Berlin has been under intense pressure to allow the euro zone to
ease back on fiscal austerity and to stimulate its economy through
more government spending or tax cuts.
U.S. and other G20 officials have previously flagged concerns about
Europe's tepid economic growth and want Germany to do more to help
its neighbors by spending and importing more.
The OECD slashed its growth forecasts for major developed economies
on Monday, urging Europe to do more to ward off the risk of
deflation.
Lew also told Japanese Finance Minister Taro Aso that Tokyo must
remain committed to calibrating all three "arrows" of its economic
policy to sustain healthy domestic growth, according to a U.S.
Treasury official at the meeting.
The comment came amid fears that Prime Minister Shinzo Abe's plan to
generate a revival through the three arrows of massive monetary
easing, spending and reform looked to be faltering in the face of
sluggish consumer demand and poor exports.
But Aso contested the view that Japan, like the euro zone, was seen
as a potential drag on global growth.
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"We agreed that with the European economy stagnating, it's extremely
important for Japan and the United States to achieve sustainable
growth," Aso told reporters after his meeting with Lew.
YEN'S SIX-YEAR TROUGH
Bank of Japan Governor Haruhiko Kuroda has vowed to stick with the
easing part of the plan as long as necessary, but is under pressure
to ease policy yet further.
As he arrived at Cairns, Kuroda said he saw no problem with the
latest slide in the yen, which hit a six-year trough against the
U.S. dollar on Friday, as it reflected growing expectations of
higher interest rates in the United States.
"What's undesirable is for exchange rates to move in a way that
deviates from economic fundamentals. From this perspective, I don't
see any major problem with current moves," he said.
European Central Bank officials have been keen to talk down the euro
to stave off the risk of deflation. Kuroda's remarks suggest that
Japan, too, hopes to reap the benefits from a weak yen, which helps
lift exports and pushes up consumer inflation.
Financial policymakers of Japan, China and South Korea gathering in
Cairns separately held their first trilateral meeting in two years,
a move that may lay the grounds to mend Tokyo's strained diplomatic
ties with its Asian neighbors.
Along with boosting growth, G20 members are working towards
finalizing regulations aimed at avoiding a repeat of the global
financial crisis.
Both Lew and Hockey expressed confidence in achieving breakthroughs
on some key issues, including the additional capital requirements
for banks deemed "too big to fail".
(Additional reporting by Gernot Heller in Hong Kong; Writing by
Wayne Cole; Editing by Richard Borsuk)
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