White House blames Europe for stunting US growth

July 31st, 2010 - 3:29 am ICT by IANS  

Barack Obama Washington, July 31 (DPA) The White House Friday said lacklustre European policies were in part to blame for the sluggish US recovery from the deep recession of the past two years.
US government figures earlier Friday showed that the US growth rate slowed markedly in the second quarter to 2.4 percent, down from 3.7 percent in the first three months of 2010. Gibbs put much of the blame squarely on the Greek and wider European debt crisis.

“There is no doubt that we have hit headwinds,” White House spokesman Robert Gibbs told reporters. “What happened in Europe, what happened in Greece in the late spring was a big part of that headwind.”

Gibbs appeared to up the rhetoric in a long-running dispute with European leaders over the right policies to support the recovery.

“The United States made some tough decisions to stabilize our financial system and to inject some recovery into (the) economy,” he added. “Europe didn’t do, quite frankly, as much. And that has no doubt stunted our growth and stunted world growth.”

US President Barack Obama, facing pressure to restore growth and jobs, has pushed for more public spending to keep a fragile recovery alive. But the debt crisis in Europe has forced governments to cut back on expenditures.

US second-quarter growth was weighed down heavily by a nearly 30-percent jump in imports, which widened the US trade deficit. Trade Representative Ron Kirk said this was partly the result of a weaker euro, which had made the continent’s exports more attractive.

But US consumers also haven’t played their part: Consumer spending grew by just 1.6 percent in the second quarter, down from 1.9 percent in the first three months of the year.

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