MARSEILLE, FRANCE — With the prospect of a drawn-out recession in the United States and Europe, officials of the Group of 7 industrialized nations faced calls Friday to act urgently to stimulate growth, even at the risk of running up deficits that have brought some countries under pressure in global financial markets.

A day after President Barack Obama pressed the Congress to enact a $447 billion package of tax cuts and new government spending to try to create jobs in the United States, Treasury Secretary Timothy Geithner insisted that such an economic stimulus would reduce the odds of America slipping into a double-dip recession.

But he warned that headwinds from Europe’s deepening debt crisis risked hitting the United States at a time when it is still weak. In remarks that indicated Washington considers Europe’s problems to be a major threat, he admonished European leaders in a letter published in the Financial Times to take “more forceful action” to show they are committed to resolving their problems.

“Europe is still under enormous pressure,” Mr. Geithner said in an interview at the G-7 with Bloomberg Television. The crisis on the continent has been a “significant” factor in the U.S. slowdown, he added.

Concerns about Europe’s ability to contain the crisis deepened Friday when Jürgen Stark, a German who sits on the executive board of the European Central Bank and has opposed the bank policy of buying bonds from Greece and other troubled countries to support them, abruptly announced his resignation. European and U.S. stocks were off sharply Friday and the euro lost more than 2 cents against the dollar.

Europe’s leaders have struggled to prevent a crisis that started in Greece nearly two years ago from contaminating larger countries like Italy and Spain, as worries about high debt and deficit levels, and the health of European banks that hold the bonds of governments hit by the crisis, spread. Even France — which, together with Germany is footing most of the bill for the crisis — has came under attack as investors grow more nervous about the state of its banks.

Of course, the United States is not blameless. As the world’s largest economy, its slowdown, ignited by the global financial crisis that blew up on Wall Street in 2008, has ricocheted through other economies, none of which has ever really recovered since then.

The downgrade to the United States’s AAA rating by Standard and Poor’s ratings agency last month also did more damage to financial companies than initially thought, for instance by forcing banks to re-price the risks of what was once considered a totally risk-free asset — U.S. Treasury securities.

That event sparked particular angst in China, the world’s largest holder of U.S. Treasuries. Although China is one of the few locomotives of global growth, Beijing is facing the twin danger of seeing its two largest customers — the United States and Europe — slowing simultaneously while it struggles to encourage growth in its own domestic demand.

China has already stepped in, albeit mildly, to help support the euro by buying the debt of Spain and Greece, two of the countries hit hardest by the crisis.

Premier Wen Jiabao and other senior Chinese officials have talked for many months about their intention to buy more euro-denominated bonds with the country’s $3.2 trillion in foreign exchange reserves, portraying this as a way to cement ties to Europe.

But bankers and economists say that while China wants to be helpful and appears to have poured tens of billions of dollars worth of foreign reserves into euro-denominated investments already this year, Chinese officials are still cautious about taking big risks with the country’s nest egg.

Washington is also ready to help ensure that Europe’s problems do not taint the United States, Mr. Geithner said. But he did not specify how, other than allowing that he is in regular consultation with his European counterparts.

“What well see in coming months is the Americans and Asians will become more open in their expression of concern about way the Europeans are handling the crisis, because unless they do address key problems, including the banks, there is a risk this is going to trigger a Lehman 2,” said Simon Tilford, the chief economist of the Center for European Reform in London. “So far they have kept their counsel publicly. But now they recognize Europe’s strategy is not working, and they are starting to panic.”

The G-7 ministers themselves, however, were not expected to announce any coordinated action or new initiatives to shore up growth in the advanced world, which the Organization for Economic Cooperation and Development Economic said Thursday is near stagnation and set to remain limp through the rest of the year, although a downturn on the scale of the last one appears unlikely.

Christine Lagarde, the chief of the International Monetary Fund, also urged Europe’s policymakers Friday to take bold and unified action to see the global economy through what she described as a “dangerous phase.”

In a speech delivered in London before she headed to join G-7 finance ministers under a blazing sun at the Palais du Pharon, a Napoleonic-era building perched by the azure waters of Marseille’s Vieux Port, Ms. Lagarde emphasized that governments with surpluses or the flexibility to use more direct fiscal action should do so.

The world is “collectively suffering from a crisis of confidence in the face of a deteriorating economic outlook,” she said. “Countries must act now and act boldly to steer their economies through this dangerous phase of the recovery.”

Ms. Lagarde also reiterated the fund’s concern about the health of Europe’s banks. Much to the irritation of European Union officials, she recently suggested that the euro zone’s bailout fund should be used to provide a big injection of capital into European banks.

On Friday, she did not back away from that position. “Some banks need additional capital,” she said, warning of the possibility of “a debilitating liquidity crisis.”

Keith Bradsher contributed reporting from Hong Kong and Landon Thomas Jr. from London.

Article source: http://www.nytimes.com/2011/09/10/business/global/g-7-faces-calls-for-urgent-action-to-spur-growth.html?partner=rss&emc=rss