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Lew says global economic demand not ‘where it needs to be’

U.S. Treasury Secretary Jacob J. Lew said global economic demand “is not where it needs to be,” singling out Europe as a laggard and calling on leaders around the world to make job creation a priority.

“Growth in Europe remains weak, with domestic demand particularly anemic,” Lew said at an investment conference held by the Commerce Department in Washington today. “It is critical that surplus countries contribute more to demand as deficit countries undergo adjustment.”

As nations such as Spain battle through recessions and unemployment exceeding 25 percent, Lew is pressuring stronger euro-area economies to do more to pull the bloc out of a downturn he said is “slowly fading.” The Treasury Department yesterday criticized Germany, the fifth-biggest U.S. trading partner, in a twice-yearly report for running large current- account surpluses, which it said contributed to a “deflationary bias” for the global economy.

In his remarks today, Lew also said China “needs to increase the flexibility of its exchange-rate regime and permit more market-determined access to capital and more open access to markets.” In yesterday’s report on global currencies and economic policies, the Treasury said China’s yuan is “significantly undervalued.”

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