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U.S. Urges G-20 Nations to Spur Domestic Demand

Treasury Secretary Timothy F. Geithner during a news conference at the G-20 Financial Ministers and Central Governors meeting on Saturday in Busan, South Korea.Credit...Chung Sung-Jun/Getty Images

BUSAN, South Korea — The American Treasury secretary, Timothy F. Geithner, told his counterparts at a Group of 20 conference on Saturday that they should not rely on spending by American consumers for their economic recovery, and he urged Japan, Germany and China to bolster domestic demand.

“We discussed how the ongoing shift toward higher saving in the United States needs to be complemented by stronger domestic demand growth in Japan and in the European surplus countries, and by sustained growth in private demand,” Mr. Geithner said.

He spoke at the end of a two-day conference of finance ministers and central bankers from the world’s 20 leading economies, who gathered to discuss ways of shoring up a fragile global recovery in the face of the European debt crisis.

At the same time, the participants also haggled over the thorny issue of reforming supervision of banks and other financial institutions to prevent a re-run of the 2008-9 recession.

The finance minister of Canada, Jim Flaherty, said there was “no agreement” on a global bank levy to pay for future bailouts. European countries and the United States generally favor some type of levy, while countries like Canada, whose banks suffered less harm during the recession, oppose it.

The representatives also continued to work, with more success, on new rules that would require banks to keep more capital in reserve as protection against a future crisis.

The discussions on fiscal policy focused on striking a balance between two conflicting strategies: continuing to stimulate recovery, which the Americans prefer, and reining in deep deficits, the primary concern in Europe.

The United States wants countries with trade surpluses, like Germany and China, to stimulate domestic demand, fearing that tighter fiscal policy will impede growth and endanger the still-nascent recovery.

“Fiscal consolidation should be ‘growth-friendly,’ ” Mr. Geithner told reporters, saying the “pace and composition of adjustment” should vary across countries.

Dominique Strauss-Kahn of the International Monetary Fund said that euro zone countries saddled with huge debts “have to consolidate strongly even if it has some bad effect on growth,” Reuters reported.

In a joint statement, the finance ministers and central bank governors said: “Those countries with serious fiscal challenges need to accelerate the pace of consolidation.” But in a nod to American concerns, the statement said, “Within their capacity, countries will expand domestic sources of growth.”

Their statement will serve as an outline when the national leaders of G-20 countries meet in Toronto on June 26 and 27.

A version of this article appears in print on  , Section A, Page 10 of the New York edition with the headline: U.S. Urges Some G-20 Nations to Stimulate Domestic Demand. Order Reprints | Today’s Paper | Subscribe

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