Global Leaders Struggle to Calm Recession Fears
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Global Leaders Struggle to Calm Recession Fears


By MARTIN CRUTSINGER / AP WRITER Friday, September 23, 2011


Display boards at the Australian Stock Exchange flash news of a falling market in Sydney, on Sept. 23, 2011. Pacific stock markets are down sharply in early trading following big losses on Wall Street amid growing fears of another global recession. (Photo: AP)
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At a news conference, they said it would be politically difficult to sell such a move to voters in their home countries, many whom have far lower standards of living than European countries.

Still, Brazilian Finance Minister Guido Mantega said the emerging nations understand the crisis must be contained.

"We are living through a worsening of the crisis in recent months and we have to prevent the crisis from making a qualitative jump, reaching a more serious level," Mantega said.

Geithner said the United States has a huge stake in seeing Europe succeed. He said European governments would "act with more force" to resolve its debt crisis in the coming weeks.

Olli Rehn, the European Union's top economic official, said the 16 other euro zone countries won't abandon Greece and allow it to default on its massive debts.

"An uncontrolled default or exit of Greece from the euro zone would cause enormous economic and social damage, not only to Greece but to the European Union" and the rest of the world, Rehn said.

The US economy appears to be slightly more stable than Europe. Still, more than two years after the recession officially ended, it is barely growing. Consumer and business confidence is low. In August, employers added no net jobs, and consumers didn't increase their spending on retail goods.

On Wednesday, the Fed said it will try to push long-term interest rates lower and make consumer and business loans cheaper by shifting $400 billion out of short-term Treasury securities and into longer-term bonds. Economists, however, doubt the plan will do much.

Obama has proposed a $447 billion jobs-creation package. But the president's plan lacks support in Congress. Republicans strongly oppose his proposal to pay for it with higher taxes on wealthier households, hedge fund managers and oil companies.

Associated Press writers Gabriele Steinhauser, Luis Alonso Lugo and Christopher S. Rugaber contributed to this report.



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