US says no recovery, 'too early' to cut stimulus

By AFP

July 15, 2010 Updated Jun 14, 2009 at 9:41 PM CDT

Top global economies should not look to cut their economic stimulus plans to fight the crisis as there is no recovery yet, US Treasury Secretary Timothy Geithner said on Saturday.

"I don't think we're at the point yet where we can say we have a recovery in place," Geithner said following two days of talks between the G8 finance ministers in Lecce in southern Italy.

"It's too early to shift towards policy restraint," he added amid calls from countries like Germany for global powers to start reducing huge deficits and spending approved to stimulate flagging economies.

"These early signs of improvement are encouraging but the global economy is still operating well below potential.... Growth therefore should remain the main focus of policy among the G8 and G20 economies," he continued.

Geithner also said world economic powers should move together to reform rules for financial markets to ensure fair competition as President Barack Obama prepares to unveil reform proposals for the financial sector next week.

"We need a level playing field globally," he said.

"As we move to put in place stronger standards in the United States we need to build a consensus internationally on complementary changes to reduce risk arbitrage," he continued.

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