The US Treasury Secretary has urged eurozone countries to “boost demand” in order to reduce unemployment and avoid deflation.
Jack Lew was speaking at a meeting of the G20 group, which includes several of the world’s largest economies.
Earlier this month, the European Central Bank introduced new measures to stimulate the area’s flagging economy.
However it has stopped short of adopting the policies favoured by its US counterpart, the Federal Reserve.
As well as launching an asset purchase programme, through which it will buy debt products from banks, the ECB cut its benchmark interest rate to 0.05%.
The bank has been under pressure to kick-start the eurozone economy, as manufacturing output has slowed and inflation has fallen to just 0.3%.
“Europe is going to need to solve its problems and resolve differences it has internally,” Mr Lew told reporters at the meeting in Australia, “but what’s clear from the US experience is that the combination of taking action to boost demand in the short run and make structural changes for the long run is an important combination, and it shouldn’t become a choice between the two.
“You really need to pursue both.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.