LECCE, Italy — A rift loomed at a summit of top finance officials here on Friday over drafting a so-called “exit agenda” from hefty stimulus government measures as the global economy now shows some signs of recovery from the recession and financial crisis.
While the United States and Britain are expected to urge members of the Group of Eight industrialized countries to stay committed to expansive monetary and fiscal measures, several European countries and Canada want unwinding those measures to be the main topic of conversation.
They argue that stimulus measures like the tax cuts, lower interest rates and expanding the money supply employed by Britain and the U.S. could fuel inflation and leave governments heavily in debt for years.
“I think what we need to work on is an exit strategy,” Canadian Finance Minister Jim Flaherty told reporters before meeting his G8 counterparts for a working dinner.
Canada, along with Germany and France, avoided many of the excesses of the credit boom that preceded the crash.
“There’s been massive government involvement — necessarily — in the economy in the industrialized world,” Flaherty said. “I think that was the right policy . . . but now we have to plan as the economies move toward growth that we withdraw significantly and let the private sector function.”
But U.S. Treasury Secretary Timothy Geithner has said he will urge fellow finance chiefs at the two-day meeting in southern Italy to stay the course on economic stimulus spending and financial reforms to avoid any risks to a fledgling recovery.
