G-8 finance officials discuss economic recovery

LECCE (ITALY): 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.

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 US 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 US Treasury Secretary Timothy Geithner told reporters this week that the "force of the global storm is receding a bit," but the US and other countries have more to do to build a sustainable economic recovery.

The US, 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.