DUBLIN (AFP) - US Treasury Secretary John Snow began a European tour aiming to highlight the need for stronger economic growth in Europe and elsewhere as Washington tries to blunt criticism over massive US deficits that have pushed the dollar to new lows.
Snow arrived in Dublin early Sunday for a weeklong tour and was holding private meetings in the Irish capital, making no public statements ahead of a forum set for Monday at Dublin City University with officials, students and alumni.
His message, according to aides, is to focus on policies promoting stronger growth, arguing that this will ease the imbalances that have prompted jitters over the US currency.
With pressure growing on Washington to trim its trade and budget deficits that sap capital from around the globe, US officials are turning the tables on some of his European critics by talking about weak growth.
The dollar tumbled last week to a record low against the euro amid fears that the United States will have problems financing its deficits.
Although US officials acknowledge the need to reduce the deficits and boost savings, they argue that the higher growth is the solution to economic imbalances.
As protests have gotten louder in Europe over the weak dollar and its impact on other economies, Treasury officials have been cautious in recent weeks in their discussions about currency levels. They have sought to shift the focus to what they see as a more fundamental issue of economic growth.
Snow, in an interview with CNBC television Friday, said he intends to press the Europeans on growth during his visit.
"They have to get at the structural barriers that they put in place that restrain the natural potential of their economy. They've got to embrace the spirit of enterprise," he said.
"They've got to look at lower tax rates, they've got to look at more open labor markets, they've got to look at reforming their pension systems. There is is an awful lot on the table that they could do. It takes political leadership."
A Treasury official briefing reporters ahead of the Snow trip declined to comment on the level of the dollar -- which slumped to a record low against the euro this past week as the euro broke 1.30 dollars -- but said Washington is doing its part to address the economic imbalances.
"One of the reasons to have faster growth in countries which are not growing is to address imbalances," the official, who asked not to be identified, told reporters.
"If you get more rapid growth in Germany or in other countries not growing as rapidly as they should, that will be beneficial to our exports and help with the reduction in the trade deficit."
Europeans have been critical of US policies leading to a massive current account deficit -- the broadest measure of trade and investment flows -- which widened to a record 166.2 billion dollars in the second quarter.
The gap has weighed on the dollar and economists fear that if foreign governments and investors turn away from the US, it could cause a precipitous drop in the greenback that sends shock waves through the global economy.
US officials have constantly argued that Washington is pursuing a "strong dollar" policy, despite concerns among some officials and experts that the US administration is content to allow the greenback to fall.
The US official said Washington is doing its part to encourage savings and address the US budget deficit -- a record 413 billion dollars in the just-ended fiscal year -- which also requires foreign capital flows, and argued that other countries should do more, as well.
From Dublin, Snow will travel to London for talks with British officials and a speech Tuesday at Chatham House in London aimed at explaining the US economic recovery.
Snow will then fly to Warsaw for a roundtable meeting with the finance ministers of the Czech Republic, Hungary, Poland and Slovakia, new members of the European Union.
The final stop of his trip will be Berlin, for a November 19-21 meeting of the Group of 20, which comprises the G7 industrial powers along with key developing nations including Argentina, Brazil, China and India.
11/14/2004 - 19:25 GMT - AFP