By James Mackenzie and Tetsushi Kajimoto
PARIS/TOKYO (Reuters) - A senior euro zone finance minister rebuffed U.S. calls for the region to ramp up government spending, saying on Wednesday that Europe was already doing enough to pump money into the world economy.
Just a week before the world's major leaders are due to meet in London to agree ways to defuse the crisis, Jean-Claude Juncker, chairman of the Eurogroup forum of euro zone finance ministers, dismissed President Barack Obama's calls for leading economies to spend more in concerted action.
A record drop in Japanese exports underlined the scale of the global collapse in spending by companies and consumers. The world's second largest economy reported exports nearly halved in February from a year earlier, a record fall, and imports also tumbled.
The closely-watched Ifo gauge showed business sentiment also remained weak in Germany, Europe's biggest economy. The main business climate index slipped to 82.1 in March from 82.6 in February and the Ifo institute said companies did not believe the bottom of the downturn had been reached yet.
President Obama renewed calls on Tuesday for leading economies to boost stimulus spending, repair credit markets and extend aid to poor countries when Group of 20 leaders meet in London on April 2.
But Juncker retorted: "The European stimulus plans are strong, they are demanding and they are significant in terms of volume and quality.
"There is no question that, upon the demand of the United States, that we would increase it," he told Europe 1 radio.
European governments say their welfare safety nets automatically pump more money into their economies, on top of the formal stimulus packages they have announced.
BANKING POWERS
The global stock market rally sparked by Washington's plan to soak up the bad and doubtful debts at the root of the crisis was faltering on Wednesday as investors turned cautious.
Europe's leading shares edged up 0.2 percent while Japan's Nikkei index ended barely changed
More jobs in the UK's once booming financial services sector were slashed, with Europe's biggest bank HSBC announcing 1,200 job cuts. Insurer Legal and General said it expected its workforce to shrink this year by much the same amount as last year's 10 percent cut.
The U.S. administration sought more powers on Tuesday to wind down failed non-banking financial institutions to avoid costly bailouts in the future.
"We will recover from this recession. But it will take time, it will take patience," Obama said in the opening statement of his second prime-time White House news conference since he took office on January 20.
http://www.whitehouse.gov/blog/09/03/24/A-time-for-global-action/
U.S. officials have recently cited glimmers of improvement in a battered housing market, whose collapse set off the credit market meltdown and the worst global recession since the Great Depression of the 1930s.
Beijing has also been making encouraging comments about China's prospects and a central bank adviser joined on Wednesday a chorus of officials suggesting the world's third-biggest economy was bottoming out from a sharp slowdown late last year.
With several emerging economies in Europe and elsewhere among the hardest hit by the crisis, the International Monetary Fund revamped its lending operations and created a new credit line for well-run economies.
So far, the IMF has loaned $50 billion (34 billion pounds) to a string of countries including Iceland, Hungary, Ukraine, Latvia, Belarus, Serbia and Pakistan. On Wednesday it said it had agreed a 20 billion euro aid package with Romania.
One of the main items on the G20 agenda for next week's meeting will be extra funding for the IMF.
China and Russia, two of the world's main holders of big foreign currency reserves, are also pushing the idea of an alternative world reserve currency to the dollar, voicing concern that Obama's massive bailout packages could weaken the U.S. currency.
Obama dismissed the idea. "I don't believe that there's a need for a global currency," he said, adding the dollar was "extraordinarily strong."
He also played down fears of a U.S.-European rift on the world economic action plan, saying the G20 summit should be able to agree on common goals of spurring world growth, revamping financial regulations and avoiding trade protectionism.
(Reporting by Reuters bureaus worldwide; Writing by Ruth Pitchford, editing by Mike Peacock)