Developed nations debate how to restore growth

With most other European countries having less of a choice when it comes to reviving their economies with extra spending, the financial leaders of the world''s most developed economies , on the other hand, were wrangling Friday over how to revive a faltering economic recovery at a time when interest rates are already low and government debt is high. The so-called Group of Seven economies which includes the U.S., Canada, Japan, the U.K., France, Italy and Germany, are all facing a similar challenge. The recovery that began a little over a year ago is already running out of steam but governments'' ability to boost growth is hampered after the financial crisis pushed up their deficits. The solutions offered by the finance ministers and central bankers gathering in Marseille, France, differ wildly. As President Barack Obama on Thursday proposed a $447 billion plan to create jobs, Treasury Chief Timothy Geithner, in an opinion piece in the Financial Times, pushed countries with lower debts to slow down consolidation to give the world economy a much-needed boost. Yet, whether that argument will gain much traction in Marseille is questionable. Germany, which weathered the financial crisis much better than most other developed economies, has already ruled out scraping cost cuts in favor of stimulus. Just days before Geithner''s piece in the Financial Times, German Finance Minister Wolfgang Schaeuble argued in the same newspaper that austerity was the only way of getting the eurozone''s struggling economies growing again. Earlier on Wednesday, in Geneva, the United Nations Conference on Trade and Development (UNCTAD) said comprehensive financial reform needed more than ever - unambitious efforts initiated after the crisis have failed. A UNCTAD proposed in its 2011 annual report issued earlier Tuesday the adoption of rules-based managed floating to curb excessive currency speculation and presents innovative measures for restructuring of national banking systems, a stricter regulation of financial markets, including for commodity derivatives. The new financial turmoil should be a wake up call for the international community and its institutions. It remains imperative to address the unfinished elements in the global financial reform agenda more vigorously than has been the case so far.