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Geithner favours bigger Europe firewall

Friday, January 27, 2012 - 02:26

Jan. 27 - U.S. Treasury Secretary Timothy Geithner has pressed Europe to boost its bailout funds, saying the euro zone debt crisis and oil prices were the two main factors influencing the pace of the US economic upturn. Sonia Legg reports from Davos.

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There were almost some unwelcome guests at the World Economic Forum - a handful of protestors from the Occupy movement attempted - and failed - to get into the Congress Centre in Davos. The US Treasury Secretary was inside at the time - it's Timothy Geithner's sixth visit to Europe in five months. He clearly sees the euro zone crisis as a key issue for the United States and had a warning about too much austerity without stimulus. (SOUNDBITE) (English): US TREASURY SECRETARY TIMOTHY GEITHNER, SAYING: "For parts of Europe for a long period of time there's going to be no alternative to very substantial adjustment in budget deficits - in the size of the commitments governments have made - there is no alternative to that. For those to work however they need some support and some financing and they need to be complimented by reforms that are also helpful for growth and competitivemness over time." To achieve that, he added, Europe must have a bigger firewall. (SOUNDBITE) (English): US TREASURY SECRETARY TIMOTHY GEITHNER, SAYING: "They will not work if there is not a stronger committment of financial rescources standing behind the European endeavour, and without that those reforms will never work, and you are right countries will face the risk that every disappointment in growth will be met with an austerity that will feed the decline and that is a cycle that you have to arrest if you are to solve the finacial crisis." PTC: SONIA LEGG, REUTERS CORRESPONDENT, SAYING: "With elections looming in the United States President Obama stayed at home this year. But Timothy Geithner isn't the only influencial American enjoying the scenery here in Davos. World Bank President Robert Zoellick is also here with his own view of the problems posed by Europe." (SOUNDBITE) (English) WORLD BANK PRESIDENT ROBERT ZOELLICK SAYING: "I focus strategically on Italy and Spain and right now Italy has got a very important reform programme so you have a technocratic government. My guess is that within six to nine months they are going to need to start to show changes - positive changes - or else you are going to get erosion of support." This will be Geithner's last trip to Davos as Treasury Secretary - he's standing down at the end of his term in office. But until, he said, he had " a long year of hard work" ahead. Sonia Legg in Davos for Reuters

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Geithner favours bigger Europe firewall

Friday, January 27, 2012 - 02:26