GO
Loading...

World needs US economy off steroids: OECD’s Gurria

The secretary general of the Organization for Economic Co-operation and Development (OECD) told CNBC he is all for the Federal Reserve's move to scale back its $85 billion per month bond buying program, a move which he says will bring "normality" back to financial markets.

Angel Gurria, speaking at the G-20 meeting of finance ministers in Moscow said even emerging markets, which have been hit hardest by Fed chairman Ben Bernanke's hints of tapering quantitative easing, need the U.S. to come off its "steroids".

(Read More: OECD Pushes for Tougher Tax Reforms)

"Imagine you have been on steroids for two or three years, you have to take your cortisone and suddenly the doctor says: 'I'm going to be reducing the doses and in one year's time, you will probably be without it,'" he told CNBC.

"You are no longer going to use the medicine and now you are bemoaning the fact that you are going to be normal again. What's wrong with normal?" he added.

He said the "best service" the U.S. can provide both emerging and developed markets is to recover "their vibrancy and growth and capacity to create jobs."

(Read More: Lew to Europe: Focus on growth and jobs)

On the OECD's new tax avoidance initiative, Gurria said the organization was playing "catch up", and the new template for the reforms would be in place in the next two years.

"The regulators are always behind the industry that they regulate, and the industry is always moving faster. So this is catch up - but this is catch up big time," he said.

The tax reforms are aimed at clamping down on loopholes used by multinationals to avoid paying billions of dollars of taxes. Earlier this year, U.S. corporations Google, Starbucks and Amazon were criticized for paying little corporation tax in the U.K., despite having large operations in the country.

Gurria defended the notable absence of the U.S. at the tax press conference, saying the ministers in attendance were the ones "pushing and financing" the initiative.

When asked if the U.S. backed the tighter measures, Gurria said "absolutely."

"We have the full backing of the U.S." he said. "This comes first from the G-20 finance ministers, then it was not only accepted but we have the mandate from the G-8, from the political leaders - not just the finance ministers."

The Treasury issued a statement saying the U.S. supports the plan.

"The United States welcomes the action plan developed by the OECD with U.S. participation," Treasury Secretary Jack Lew said in the statement. "This is a major step toward addressing tax avoidance by multinational firms in the global economy and represents a concerted effort to raise standards around the world. We must address the persistent issue of 'stateless income,' which undermines confidence in our tax system at all levels," he said.

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave

Contact World Economy

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More