UPDATE 1-U.S. supports IMF's role in Europe -Treasury official
WASHINGTON, July 15 (Reuters) - The United States supports the role of the International Monetary Fund in helping the euro zone restore financial stability, a senior U.S. Treasury official said on Monday.
"It is always easy to second-guess, once financial conditions have stabilized somewhat, decisions that are made at the height of the crisis," said Lael Brainard, the top U.S. official for international economic affairs.
"But what we learned from our crisis is that it's critical to act with decisive force," she said during a conference in Washington. "It's really for the euro area to decide how to take that forward."
Brainard spoke ahead of this weekend's meeting in Moscow of finance ministers and central bank chiefs from the Group of 20 leading economies. Europe's slow path to recovery is likely to be a focus of discussions, as well as possible risks in emerging markets and slower growth in China.
The IMF began a partnership with European institutions several years ago to help stem the debt crisis in Europe and prevent it from spreading to the rest of the world. But the lenders have had to contend with divergent rules and modes of operation, leading some officials to urge the IMF to play a smaller role in future European rescue packages.
In previous meetings, the United States has encouraged European countries that have a trade surplus, such as Germany, to focus on boosting domestic demand in order to help the recovery. The tone is likely to be similar this time, as Brainard urged Europe to have a "demand plan" to boost growth, and also to move quickly toward a banking union.
"The United States said it is coming into the G-20 meetings with the strongest economy since the group started meeting, perhaps giving it a better bargaining position as it pushes for growth measures," Brainard added.
The G-20 first started meeting in 2008.
Brainard minimized the risks to global growth from emerging economies, which have been hit by capital outflows as markets fret over the end of ultra-loose monetary policy from the U.S. Federal Reserve.
"If we look across (emerging markets) broadly, we see more resilience as a group. We see more flexibility in exchange rates, more ability to allow shocks to be absorbed, as well as better buffers being built into systems," she said.
Brainard added that some developing economies face risks, especially if economic risks overlap with political crises, and the United States was monitoring those closely.
Political instability combined with thwarted growth expectations have prompted a wave of protests and social unrest in places like Turkey, Brazil and Egypt in recent weeks.
"But ... as a group, many of the emerging economies have substantial capacity still to support domestic demand, and to contribute to global growth," Brainard said. "And of course many of those are in the G-20, and we'll continue to emphasize this."