* Says G20 must correct developments that lead to imbalances
* Calls for strengthening of market economy processes
* Says G7 recognises German contribution to global growth
* Warns of fallback into 'planned economy thinking'
(Adds quotes, background)
GYEONGJU, South Korea, Oct 22 (Reuters) - Germany's economy
Minister resisted a call from the United States on Friday for
direct action in tackling foreign exchange and trade imbalances,
warning of the risks of succumbing to "planned economy"
Rainer Bruederle, who is attended a meeting of G20 finance
ministers in South Korea in place of Germany's hospitalised
finance minister, said the Group of 20 leading economic powers
must correct the errors that have led to imbalances but must
rely on market processes to do so.
"We need a strengthening of the market economy processes,"
Bruederle told reporters on the sidelines of the G20 meeting,
warning against "a fallback into planned economy thinking".
"We must correct undesirable economic developments that lead
to imbalances," he added.
Earlier, U.S. Treasury Secretary Timothy Geithner, in a
letter to finance leaders seen by Reuters, called for more
proactive moves by both developed and developing countries.
"Countries with persistent surpluses should undertake
structural, fiscal and exchange rate policies to boost domestic
sources of growth," he said. [ID:nTOE69L056]
Geithner's overtures have already been rejected by countries
as diverse as India and Japan and Bruederle's comments further
dent prospects of the G20 agreeing a universal deal that would
address global economic imbalances and tackle attempts by many
emerging economies and others to weaken their currencies.
Bruederle said finance ministers from the Group of Seven
countries recognised at an earlier meeting on Friday that
Germany had made an important contribution to the recovery of
the global economy.
The G20 needed to tackle the root causes of the world's
economic troubles, he added.
"We need more balance, more stability in the global economic
growth process," Bruederle said, adding that the International
Monetary Fund should take a stronger monitoring role.
(Reporting by Gernot Heller, writing by Paul Carrel; Editing
by John Stonestreet)
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