Australian Treasurer Wayne Swan said European policy makers need to press ahead with measures to spur economic growth and strengthen their fiscal positions as he travels to Washington for a Group of 20 nations meeting.
“Key advanced economies are still weak and there remains a clear threat posed by the European sovereign-debt crisis,” Swan said in a statement today. “Important reforms are still needed to minimize the risk of contagion from instability in Europe.”
Swan said G-20 finance ministers will seek to build on pledges made last year to ensure the International Monetary Fund “has the resources necessary to help insulate the global economy from the ongoing problems in Europe.” He will also attend meetings of the World Bank and IMF.
The Washington-based IMF is seeking to boost its lending capacity from about $380 billion to shield the global economy against any deepening of Europe’s debt turmoil. Japan, the world’s third-largest economy, said this week it will provide $60 billion to the IMF, the largest donor yet outside of Europe. Swan didn’t indicate Australia’s position in his statement.
The treasurer said he will be reporting to his international colleagues that the Australian budget will return to surplus in the fiscal year beginning July 1.
Swan reiterated Prime Minister Julia Gillard’s statement yesterday that a return to surplus will help give the Reserve Bank of Australia flexibility to cut its benchmark interest rate further if it considers that necessary. The country’s key rate is the highest among major developed nations at 4.25 percent.
A balanced budget will “send a clear message about Australia’s economic strength at a time of global uncertainty,” Swan said.
The treasurer, named in September as Euromoney magazine’s finance minister of the year, said he will meet with IMF Managing Director Christine Lagarde, outgoing World Bank President Robert Zoellick and U.S. Federal Reserve Chairman Ben Bernanke during the visit.
To contact the reporter on this story: Michael Heath in Sydney at firstname.lastname@example.org
To contact the editor responsible for this story: Stephanie Phang at email@example.com