China-style stimulus not for all: Trichet

China-style stimulus not for all: Trichet

SINGAPORE

Tuesday, November 11, 2008

EUROPEAN Central Bank chief Jean-Claude Trichet warned that many nations lacked the fiscal ammunition to take a cue from China and spend billions of dollars to ride out the global financial storm.

Beijing pitched in nearly US$600 billion to the global campaign to stave off the worst downturn in decades to the applause of markets and policymakers who had looked to China to do its bit to help the faltering global economy.

While there is mounting evidence that the United States, Japan and much of Europe are in recession, the world's fourth-largest economy is still growing, albeit at a slower pace than the heady double-digit growth of the past six years.

Trichet said that while some countries were well placed to pump-prime their economies, many lacked sufficient leeway in their budgets.

"They already have deficits now, which are very substantial, and for them the room for manoeuvering does not exist," he told Brazilian TV after the G20 meeting in Sao Paulo.

Reuters