Tim Geithner urges Europe to act decisively on debt crisis

US treasury secretary urges European governments to use ‘overwhelming force’ to address eurozone’s financial woes. The US treasury secretary, Tim Geithner, has urged European governments to use “overwhelming force” to address the eurozone’s financial woes. Comparing Europe’s troubles to the US banking crisis, Geithner told a New York conference on Wednesday that Washington had been “behind the curve” when it came to tackling its financial crisis. Political leaders had put aside their differences to act swiftly, he said, “but we’re still living with scars of that crisis”. Geithner, who will attend a meeting of European finance ministers in Poland on Friday, said: “If you think about the basic lessons of the financial crisis, it takes a number of things to solve it definitively.” US stock markets rose as Geithner was speaking, cheered by news that the German chancellor, Angela Merkel, had moved to quash speculation that Greece was nearing bankruptcy or would be forced to leave the 17-nation eurozone. After a telephone conference with Merkel and the Greek prime minister, George Papandreou, French president Nicolas Sarkozy said France would do “whatever it takes” to save Greece. But the US stock markets started to lose their gains as investors became more nervous about the scale of the European crisis. Nick Kalivas, vice-president of equities and financial research at MF Global in Chicago, said the US markets were being driven by news from Europe. Kalivas said good and bad news was acting to “push and pull” the market up and down amid scepticism from investors about the ability of Europe’s leaders to finalise a deal. “The US markets would be doing a lot better if the European crisis wasn’t around,” he said. Speaking in New York at the Delivering Alpha conference – organised by CNBC and Institutional Investor magazine – Geithner said Europe needed to take drastic steps to address its problems. But he said he was confident Europe would act decisively. “There is no chance that the major countries of Europe will let their institutions be at risk in the eyes of the market,” Geithner said. This will be the first time Geithner has addressed Europe’s Economic and Financial Affairs Council, known as Ecofin. The two-day meeting is being held in Wroclaw. “They invited to me come and I thought it would be polite to accept that,” he said. “What they’re doing is very challenging … They have a terrible growth problem.” Geithner has been pushing for some time for Europe to take more decisive action to address its debt crisis. The Wroclaw meeting is Geithner’s second European trip in seven days. Earlier this week he told the Group of Seven meeting of finance ministers and central bankers in Marseilles, France, that they should “act more forcefully” to address the crisis. On Tuesday, the US president, Barack Obama, said Europe must do more to address its economic woes. “In the end the big countries in Europe, the leaders in Europe, must meet and take a decision on how to co-ordinate monetary integration with more effective coordinated fiscal policy,” Obama told reporters at the White House. Nicolas Veron, a senior fellow at Bruegel, a Brussels-based economics research group, said the US was sending very clear signals about the scale of its concern about Europe. “There is a feeling in the US that there is a risk of contagion,” he said. “And this justifies the US doing what it can to avoid a disorderly outcome.” European debt crisis Financial crisis European banks Banking United States Europe Dominic Rushe guardian.co.uk

Posted by on September 14, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.