New US Secretary of the Treasury Jacob Lew heading for Europe to discuss euro zone problems.
U.S. Treasury Secretary Jack Lew will travel to Europe in early this month, his second international trip since taking office a month ago, to discuss recent deterioration in the euro zone and prospects for boosting global economic growth. Lew will travel to Brussels, Frankfurt and Berlin on April 8-9 to meet with the leaders of the European Council and the European Commission as well as European Central Bank Chief Mario Draghi, among others, the Treasury said on Friday.
He will hold “discussions with his counterparts on economic developments in Europe and policies to boost global growth and promote financial stability,” the Treasury said in a statement. The euro zone crisis flared up again recently after a bailout of Cyprus’ banks hit depositors for the first time since the crisis started, raising fears of contagion and possible bank runs
Meanwhile, the euro zone will not return to growth until 2014, the European Commission said on Friday, reversing its prediction for an end to recession this year and blaming a lack of bank lending and record joblessness for delaying the recovery. The 17-nation bloc’s economy, which generates nearly a fifth of global output, will shrink 0.3 percent in 2013, the Commission said, meaning the euro zone will remain in its second recession since 2009 for a year longer than originally foreseen. The Commission, the EU executive, late last year forecast 0.1 percent growth in the euro zone’s economy for 2012, but now says tight lending conditions for companies and households, job cuts and frozen investment have delayed an expected recovery.
The Commission sees the euro zone economy growing 1.4 percent in 2014, with a figure of -0.6 percent for 2012. “The improved financial market situation contrasts with the absence of credit growth and the weakness of the near-term outlook for economic activity,” said Marco Buti, the commission’s director-general for economic and monetary affairs. “The labour market… is a serious concern,” he said, in a preamble to the Commission’s latest forecasts.