Blame It on the U.S.

By Reuters - Print this article Print

Obama, who will inherit the worst economic mess since the Great Depression when he takes over from President George W. Bush, plans to nominate Timothy Geithner, president of the New York Federal Reserve Bank, as Treasury secretary, a transition official said. The appointments should bring some cheer to the furrowed brows in world markets.


Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon blamed the United States for starting the crisis and called for better banking regulations.

In other developments, Britain prepared plans to inject billions of pounds into the economy to stave off recession amid slumping house prices, rising unemployment, and shrinking manufacturing output.

Finance Minister Alistair Darling will unveil the package of tax cuts and extra public spending expected to total up to 20 billion pounds ($30 billion) on Monday, newspapers said.

A cut in the so-called value added tax or VAT, is aimed at giving a pre-Christmas boost to consumers' spending power.

"Doing nothing is not an option," Prime Minister Gordon Brown said in a speech he will give to businessmen on Monday. "We need timely action now to prevent permanent damage."


China also planned more ways to support its economy, now showing signs of being infected by the crisis after years of extraordinary growth.

State television said provincial governments have made plans to invest a total of more than 10 trillion yuan ($1.5 trillion) over the next several years. It was unclear whether that would be on top of a 4 trillion yuan stimulus package announced by the central government earlier this month.

South Korean officials said they had further policy options to combat the global downturn, putting pressure on the central bank to cut interest rates in Asia's fourth-largest economy.

"We need financial support for small companies and exporters," Prime Minister Han Seung-soo said.

In the Gulf, also feeling the crisis despite its oil riches, Saudi Arabia's central bank slashed its benchmark lending rate from 4 percent to 3 percent, the second reduction in a month to keep credit markets moving and boost liquidity.

In Cairo, President Hosni Mubarak said Egypt's already-wide budget deficit would increase as it spends more to avert economic slowdown. He called for cheaper credit to boost the economy.

(Reporting by Reuters bureaux; Writing by Angus MacSwan; Editing by Matthew Jones)

This article was originally published on 2008-11-24
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