Sept. 13 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner plans to urge European Union finance ministers to step up their crisis-fighting strategy when he meets with them this week in Poland, a euro-area official said.
The official spoke on condition of anonymity because preparations for the meeting, which takes place in Wroclaw, Poland, on Sept. 16 and 17, are confidential. It will be the first time Geithner has attended a session of Europe’s Economic and Financial Affairs Council, known as Ecofin.
The visit “underlines the nervousness of the administration in the U.S. about what’s happening in Europe” and the effect the region’s debt crisis is having on U.S. financial markets, Julian Jessop, chief global economist at Capital Economics Ltd. in London, said in an interview today.
The trip to Wroclaw will be Geithner’s second to Europe in a week. He returned to Washington on Sept. 10 from a Group of Seven finance ministers and central bankers meeting in Marseille, France, where he urged European leaders to “act more forcefully.”
“I think they’re going to have to demonstrate to the world they have enough political will,” Geithner told Bloomberg Television on Sept. 9. He said the U.S. has “a huge interest in helping the Europeans through this and we’re going to do everything we can to encourage them to act more forcefully.”
The G-7 finance chiefs vowed in Marseille to support banks and try to bolster slowing economic growth.
“We will take all necessary actions to ensure the resilience of banking systems and financial markets,” the officials said in a Sept. 9 statement. “Concerns over the pace and future of the recovery underscore the need for a concerted effort at a global level in support of strong, sustainable and balanced growth.”
Geithner is interested in the Poland meeting because it includes officials from all 27 EU nations, a broader group than the Group of Seven, said a Treasury official who declined to be identified because details of Geithner’s plans haven’t been made public.
The Treasury secretary’s trip has “no specific goals” and is “part of his regular communication/consultation with his European counterparts,” White House press secretary Jay Carney told reporters today.
Geithner could urge European leaders at the Poland meeting to be more decisive, said Phillip Swagel, who was an assistant Treasury secretary for economic policy in the George W. Bush administration. “If they’re going to support the countries in trouble, do it,” Swagel said. “Or Germany and France should just decide they’re going to focus on their own banks.”
Pacific Investment Management Co.’s Mohamed A. El-Erian said today that organizations like the International Monetary Fund need to act with European banks at risk of being engulfed in the region’s sovereign-debt crisis.
“We’re getting close to a full-blown banking crisis in Europe,” El-Erian, Pimco’s chief executive officer and co-chief investment officer, said in a radio interview on “Bloomberg Surveillance” with Tom Keene and Ken Prewitt. “We are in a synchronized global slowdown. There’s very little confidence in economic policy making both in Europe and the U.S.”
The World Bank and the IMF meet Sept. 23-25 in Washington as European officials work to keep the currency union from unraveling while weighing whether to allow Greece to default. French banks have become a focal point because of their holdings of bonds issued by the euro region’s most-indebted nations, topping the list of Greek creditors with $56.7 billion in overall exposure, according to a June report by the Bank for International Settlements.
--With assistance from Rebecca Christie and Kevin Costelloe in Brussels, Sandrine Rastello, Roger Runningen and Peter Cook in Washington and John Detrixhe in New York. Editors: Kevin Costelloe, Carlos Torres
To contact the reporters on this story: John Fraher in London at firstname.lastname@example.org; Ian Katz in Washington at email@example.com
To contact the editor responsible for this story: Chris Wellisz at firstname.lastname@example.org