Europe still biggest headwind to global recovery: U.S.


Europe's financial crisis remains the biggest hurdle to global economic recovery and will be in focus at a meeting of world finance chiefs in Mexico City this weekend, a senior U.S. Treasury official said on Friday.

"Recognizing that Europe remains the strongest headwind to global growth, there will be considerable interest among the G20 on the European crisis response," the official said.

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The comments contrast with those from some other members of the Group of 20 leading economies, who said the United States' own fiscal problems will loom largest at the G20 meetings.

The senior U.S. Treasury official, who spoke with reporters on condition of anonymity, also said the meetings will focus on further measures to be taken by countries in emerging economies to strengthen domestic demand and loosen exchange rate policy.

The official focused particularly on China, which still has "further to go" in having a flexible exchange rate - although it has allowed the yuan currency to appreciate recently.

(Reporting by Anna Yukhananov and Alister Bull)