Geithner Heads to Europe for Talks on Crisis

Friday, 21 May 2010 07:17 AM

 

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U.S. Treasury Secretary Timothy Geithner will make stops in Britain and Germany next week to discuss troubled economic conditions there en route home from China, the Treasury Department said.

Thursday night's announcement followed another day of turmoil in financial markets as France and Germany sought to patch up a public rift and work together to solve a European debt crisis.

The U.S. Treasury said Geithner will meet Britain's new Chancellor of the Exchequer, George Osborne, in London next Wednesday. He then travels to Germany for meetings with European Central bank President Jean-Claude Trichet in Frankfurt and German Finance Minister Wolfgang Schauble in Berlin on Thursday.

Geithner leaves on Friday for Beijing where he will participate in meetings next Monday and Tuesday of the U.S.-China Strategic and Economic Dialogue.

Concern has been rising that Europe lacks enough unity to come up with a package of measures to restore stability to the region, especially after Germany decided on its own earlier this week to ban some types of short selling to try to curb speculation.

That led to a clash between France and Germany, co-founders of the euro, that spooked markets on Wednesday and sent the currency to a four-year low beneath $1.22 U.S.

France and Germany now have pledged to work cooperatively but market participants are still uneasy about the potential for a European crisis to spill over into other regions that are still in recovery from the 2007-2008 financial crisis.

U.S. stocks sank nearly 4 percent on Thursday on fears the euro zone's efforts to tackle its sovereign debt crisis might fall short and jeopardize the global economic recovery.

Geithner said in a CNBC television interview this week that he wants to see Europe stick with agreed plans for restoring economic stability to the region.

He said it was important to keep moving on a 750-billion-euro package of loans -- from the European Union and International Monetary Fund -- to prevent the European debt crisis from spreading.

"Absolutely Europe has the capacity to manage through this. We just want to see them follow through," he said on Wednesday.

© 2014 Thomson/Reuters. All rights reserved.

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