U.S. Treasury Chief Talks of Growth in Europe

At the outset of a joint press interview with Mr. Lew, Mr. Van Rompuy stressed the difficult climate both economies face. “We continue to rebalance and rebuild our economic potential to ensure strong, sustainable and inclusive growth and jobs going forward,” Mr. Van Rompuy said. “It is a long and difficult process, but one we stick to with determination on both sides of the Atlantic.”

But ultimately both also gestured to the deep divisions in the U.S. and European approaches to the crisis, and to the divergent paths their economies have taken in its wake.

“Our economic recovery is gathering strength,” Mr. Lew said. “The U.S. economy has expanded for 14 consecutive quarters, and although the pace of job creation is not as fast as we would like, the private sector has added jobs for 37 straight months.”

In contrast, the euro zone continues to struggle with shrinking economies and rising unemployment, with Germany, France and Spain all contracting in the fourth quarter of 2012. That has made the challenge of fiscal consolidation yet harder.

The question that Mr. Lew came to Europe to raise is how to strengthen the European economy — for the Continent’s own sake, as well as for the good of the global economy. The Obama administration has an investment in Europe’s growth, U.S. officials have stressed repeatedly, because of the deep financial and trade ties between the countries.

“We have an immense stake in Europe’s health and stability,” Mr. Lew said. “I was particularly interested in our European partners’ plans to strengthen sources of demand at a time of rising unemployment.”

Mr. Lew has urged countries with stronger economies, like Germany, to slow their pace of fiscal consolidation in order to benefit the entire euro zone. But in the past few years, such advice has often fallen on deaf ears, given the political constraints in Europe and many officials’ deep belief in budget balance as a prerequisite to growth.

Mr. Van Rompuy mentioned the “vivid debate” over “fiscal policy and the pace of fiscal consolidation” in his remarks.

The trip is Mr. Lew’s first to Europe as Treasury secretary. Earlier this year, he visited Beijing in his first trip abroad in the post. Though he worked for a time in the State Department in the Obama administration, Mr. Lew is primarily known as a domestic budget expert.

In contrast, his predecessor, Timothy F. Geithner, was an international finance expert who had previously worked at the International Monetary Fund and as Treasury under secretary for international affairs.

The Treasury said Monday that Pierre Moscovici, the French finance minister, pulled out of a meeting and joint news conference with Mr. Lew that was scheduled for Tuesday. The French government is facing a scandal after its budget chief admitted holding secret offshore accounts.

Mr. Lew is also traveling to Frankfurt to meet with Mario Draghi of the European Central Bank, and to Berlin to meet with Wolfgang Schäuble, the German finance minister.

Earlier on Monday, Mr. Lew met with other European officials, including José Manuel Barroso, the president of the European Commission, executive arm of the European Union. A Treasury official said they, too, discussed the need for Europe to generate demand, as well as the situation in Cyprus, a cross-border banking union and a prospective free-trade agreement.

Article source: http://www.nytimes.com/2013/04/09/business/global/us-treasury-chief-talks-of-growth-in-europe.html?partner=rss&emc=rss