APEC Finance Officials Concerned by Impact of Europe Debt Crisis on Region
Deputy finance ministers meeting at the Asia-Pacific Economic Cooperation forum in Honolulu expressed concern over the danger posed by contagion from Europe for a global economy still recovering from the 2008 financial crisis.
Officials discussed the impact the crisis in Europe could have on the trade and financial institutions of the 21 APEC member countries, a senior U.S. Treasury official told reporters at a briefing in Honolulu. There was no discussion on actions the U.S. or China might take to help stem the spread of the crisis in Europe and discussion focused on how the countries could protect themselves, the official said.
The deputy finance ministers discussed focusing on domestic growth to protect against weakening trade prospects in Europe, the official said. They also discussed how rapidly the Eurozone crisis could spread to their financial institutions and markets, the official said.
Italy will seek to sell 5 billion euros ($6.8 billion) of Treasury bills after yields on 10-year notes surged to 7.25 percent, more than the 7 percent level at which Greece, Ireland and Portugal sought international bailouts. At 1.9 trillion euros ($2.6 trillion), Italy’s debt exceeds that of Greece, Spain, Portugal and Ireland combined, though unlike those nations, it has systemic importance as the world’s third-largest bond market and eighth-biggest economy.
Lael Brainard, Treasury undersecretary for international affairs, said on Nov. 9 that Europe must speed up construction of a “firewall” to protect countries that have sound policies.
U.S. Chides China
The U.S. told China that its currency was still undervalued and that yuan gains in the last 18 months were still too small, the Treasury official said. A communique that will be released later this week at the APEC forum will mirror the language of the G-20 communique earlier this week in Cannes, France that reaffirmed the need for country’s to align their currencies, according to the official.
Lawmakers in the U.S. are pressing the Obama administration to take a stronger stand on China’s currency. The U.S. Senate approved a bill last month that would let manufacturers seek duties on Chinese imports if they prove they were harmed by manipulation of the yuan.
The U.S. contends China has kept its currency undervalued. President Barack Obama has pressed Chinese leaders to take steps to boost domestic consumption to address trade imbalances.
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