May 25, 2012 / 10:42 PM / 7 years ago

EU says China, U.S., Japan also have economic work to do

BRUSSELS (Reuters) - The United States and Japan must tackle their tax issues and China must relax restrictions on the yuan, as they share responsibility with Europe for restoring global economic health, EU leaders said ahead of a June summit of the G20 leading economies.

In a letter addressed to all 27 European Union nations, European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy said Europe was doing it all it could.

“Europe has stepped up and assumed its special responsibility for securing the financial stability of the euro area and we will continue to do so,” said the letter in the run up to the G20 summit in Los Cabos, Mexico.

“It is now up to all G20 members to enhance their efforts and deepen our cooperation in order to ensure a sustained global economic recovery.”

In particular, it looked to the United States to avoid falling off a “fiscal cliff” and called on China to deliver reforms.

“Whilst we are firmly focused on playing our part, at Los Cabos, all other G20 partners should also recognize their responsibilities in building a sustainable recovery,” the letter said.

It said the United States and Japan needed to implement “credible medium-term fiscal consolidation plans” and the United States must avoid the problems that could result from tax rises and spending cuts meant to take effect at the end of the year.

“We should also call on China to continue strengthening its social safety nets, carry out further structural reforms and move to a market-determined exchange rate.”

For the euro zone area, Rompuy and Barroso reaffirmed their commitment to safeguarding “financial stability” and repeated they wanted Greece to remain in the single currency, while respecting its commitments.

Data has shown EU-internal imbalances are being reduced, it said, although more needed to be done and in this context, it referred not just to countries in deficit, but also those in surplus.

For the Los Cabos summit, Rompuy and Barroso said growth and employment had to be a major focus, but other areas included trade as a source of growth and jobs.

“We will, therefore, call on the G20 to enhance the fight against protectionism and to further strengthen the multilateral trading system,” the letter said.

“The recent surge in protectionism is a major concern and the G20 should strengthen the existing monitoring mechanism and improve on notifications and transparency.”

As part of efforts to prevent further crisis, financial regulatory reform was another major theme.

“The EU is well on track to have all financial reforms fully in place by 2013 and we expect our partners to move along with us,” the EU leaders said.

Editing by Myra MacDonald

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