Rifts emerged at a summit of top finance officials here today over the importance of winding down hefty government stimulus plans now that the global economy shows signs of recovery from the credit crisis, according to AP. 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 a discussion of ending those measures to be the main topic. They argue that the tax cuts, lower interest rates and money supply expansion employed by Britain and the U.S. could fuel inflation and leave governments heavily in debt. «I think what we need to work on is an exit strategy,» Canadian Finance Minister Jim Flaherty told reporters before a working dinner. «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 told reporters this week that the «force of the global storm is receding a bit,» but the U.S. and other countries have more to do to build a sustainable economic recovery. The U.S., Japan, Germany, France, Britain, Italy, Canada, Russia and the European Union are trying to set the agenda for a meeting of G-8 national leaders in July in earthquake-stricken L'Aquila in central Italy. «We think it will be completed in a positive way, working together for a common solution, but this we will know tomorrow,» Italian Finance Minister Guilio Tremonti told reporters. There is also potential division over whether Europe should plump for U.S.-style «stress tests» to check the stability of its banks. Britain has conducted the tests, but released less detail on the results than the United States, while Germany has argued they could undermine the fledgling economic confidence. To pursue his agenda, Geithner had bilateral meetings planned with his Russian and Japanese counterparts Alexei Kudrin and Kaoru Yosano as well as Italy's central bank chief Mario Draghi on Friday and with British Treasury chief Alistair Darling on Saturday morning. There is more optimism than when ministers last met as part of the wider Group of 20 in England in April. Financial markets have rallied strongly over the last three months largely on better-than-expected economic data, as well as hopes that the financial sector is stabilizing. Ten of the largest U.S. banks were ruled strong enough to repay $68 billion in government bailout money. Other data out on Thursday showed a rise in U.S. retail sales and lower U.S. unemployment claims, as well as rising global demand for energy. But there are worries in the U.S. and Britain that continental Europe has not done enough to deal with the recession _ hence the continuing dearth of resurgent signs in the euro zone economy, as underlined by a 21.6 percent fall in industrial production in the year to April in the euro zone.
