Geithner presses EU to act as Greece bailout is delayed
US Treasury Secretary Timothy Geithner urged EU policymakers to scale up their rescue fund to tackle the debt crisis and speak with one voice as eurozone ministers delayed a decision on Greece's next bailout loan.
US Treasury Secretary Timothy Geithner urged eurozone ministers to leverage their 440-billion-euro ($606 billion) bailout fund and free more resources to tackle the debt crisis during a closed meeting of EU finance ministers in Wroclaw, Poland.
The meeting came as officials from the eurozone and the International Monetary Fund said they will decide in October whether to approve a batch of bailout loans that Greece needs to keep it from bankruptcy.
Analysts say the European Financial Stability Facility (EFSF) - set up in May 2010 and so far used to bail out Portugal and Ireland - must be increased in size to build market confidence in Europe's ability to contain the crisis.
But Germany and others refuse to bolster the fund and eurozone national parliaments have yet to ratify new powers agreed for the fund two months ago that would allow it to make precautionary loans to countries in trouble and buy sovereign bonds to prop up struggling states.
After attending the opening talks between eurozone finance ministers, Geithner said Europeans must work together to address the crisis.
"What's very damaging is not just seeing the divisiveness in the debate over strategy in Europe but the ongoing conflict between countries and the central bank," he said. "Governments and central banks need to take out the catastrophic risk to markets," he added, and prevent "loose talk about dismantling the institutions of the euro."
Geithner's appearance at the meeting of European ministers is a sign of how the US is getting increasingly concerned over the global impact of the eurozone debt crisis. Earlier this week, US President Barack Obama warned that Europe needed to do more to solve its problems.
"We will continue to see weaknesses in the world economy, I think, so long as this issue is not resolved," said Obama. moreOf course, this gathering wouldn't have been a total waste of time if progress could have been made towards the implementation of a financial transaction tax. But hey, it looks like the Germans intend to bring it up at every such gathering so there is a tiny ray of hope. The banksters HATE the very IDEA of a transaction tax—mostly because it would destroy the casino and force bankers to earn their living honestly. But because it remains one the best ideas ever, the transaction tax is not going away either.
Germany calls for eurozone to unilaterally implement finance tax
Germany has called for the eurozone to go it alone if necessary and implement a financial tax despite opposition from the US and UK. EU finance ministers, meanwhile, called for European banks to be strengthened.
Germany's finance minister supports pushing through a tax on financial transactions within the 17 member eurozone currency union in the face of opposition from nations such as the United Kingdom and the United States, two of the world's largest financial markets.
"We plan on setting up a financial transaction tax this fall, if need be only in the eurozone," German Finance Minister Wolfgang Schäuble told the newspaper Bild am Sonntag.
Supporters of the move, such as Germany and France, believe a financial transaction tax would check speculation and slow the growth of bubbles while raising money that could be used to bail out banks in crisis situations.
The European Union, however, remains divided over the measure with non-euro states such as Sweden and Britain expressing opposition. Opponents argue that such a tax would drive business to non-taxed foreign markets.
"There is no consensus," said Polish Finance Minister Jacek Rostowski during a meeting of his EU counterparts in Wroclaw over the weekend. "No one expects this element to be a crucial one in our attempts to stabilize the euro."
Although US Treasury Secretary Timothy Geithner called on eurozone states to leverage more money to combat the sovereign debt crisis, he reportedly opposed Schäuble's call for a financial transaction tax.After a year of street protests that have terrified if not brought down governments, these protests are getting a bit more focused on who actually is the bad guys. There is a planned occupation of the financial district in New York so even the endlessly-patient, put-upon USA workers may finally be getting off their duffs.
Geithner, the first US treasury secretary to attend a meeting of EU finance ministers, sparked controversy on Friday when he criticized the EU's handling of the debt crisis and called for more decisive action. more
Workers take to the streets as debt summit concludes
France 24 10.09.11
Europe stood defiant in the face of US criticism about its public finances Saturday as finance chiefs wrapped up two days of talks in Wroclaw, Poland. Outside the summit, at least 20,000 European workers protested against austerity measures.
AFP - Europe hit back Saturday at US lecturing on its public finances, insisting the eurozone is better off than global rivals as talks on the debt crisis drew to a close.
The defiant stand came as finance ministers wrapped up two days of talks in Poland that delayed a decision on blocked loans for Greece, failed to resolve a row with Finland which wants collateral and stirred a fruitless debate about introducing a financial transactions tax.
"Taken as a whole, it is probably better than other major advanced economies," European Central Bank chief Jean-Claude Trichet said of the 17-nation eurozone's debt record as the ministers and central bankers from the 27-state European Union headed for the exit.
Discussions were marred on Friday by a spat with guest US Treasury Secretary Timothy Geithner, who prodded the eurozone to take quick action on the debt crisis anchored in Greece.
As police said at least 20,000 workers from around Europe swarmed the streets of Wroclaw to protest against EU-ordered austerity, Trichet described the medium-term prospects as "quite encouraging if you compare with other major advanced economies."
He tipped a combined year-end, annual deficit of 4.5 percent of Gross Domestic Product -- whereas the United States expects its public deficit to reach 8.8 percent this year.
By the time one factors in "superior" cumulative debt levels elsewhere, Trichet said the overall eurozone outlook was therefore not as endangered as some others. more