He also said he will lean on European policy makers to do more to fix credit markets to ensure easier financing for the small- and medium-sized businesses which often provide the bulk of hiring. The European Central Bank has said it’s searching for remedies.
With the yen weakening below 101 per dollar for the first time since April 2009, Governor Haruhiko Kuroda sought to quell any criticism by saying the Bank of Japan isn’t targeting a currency level as it boosts bond-buying to hit a 2% inflation target.
Osborne said he will use the meeting as “an opportunity to consider what more monetary activism can do to support the recovery, while ensuring medium-term inflation expectations remain anchored.”
Highlighting the Eurozone’s economic weakness, unemployment reached 12.1% in March, with a level of 26.7% in Spain, according to the EU’s statistics agency. Greece yesterday reported 27% unemployment in February.
The 17-nation euro-region economy has contracted for five quarters, and the recession probably extended into the first three months of this year, according to a Bloomberg News survey of 19 economists. The European Commission sees gross domestic product falling 0.4% this year.
Not all in Europe are willing to dim the fiscal focus. “It’s about restoring confidence in the sustainability of public finances, and that’s one important precondition for sustainable growth,” Bundesbank President Jens Weidmann said today.
Some are continuing the course. Seeking to pull itself out of recession and a banking crisis without outside assistance, Slovenia this week offered an economic overhaul including a higher sales tax, a property levy and cuts to public-sector wages to help narrow its budget shortfall.
The G-7 officials conclude their talks tomorrow and may not release a formal communique.