Bloomberg News

Geithner Urges Europeans to Deliver a Plan on Debt Crisis

October 25, 2011

(Updates with Geithner comments on Europe and jobs bill starting in the third paragraph.)

Oct. 25 (Bloomberg) -- U.S. Treasury Secretary Timothy F. Geithner said European leaders should “deliver on the commitments they’ve made” for a rescue from the euro-area debt crisis.

“They’re saying a lot of the right things and they’re clearly working on it and they’re moving with a greater sense of urgency,” Geithner said today at a news conference in Wilmington, North Carolina. “That’s all welcome, but until we see what they come together with, it’s a little hard to evaluate.”

European leaders are convening tomorrow to reach a plan for solving the sovereign debt crisis following an Oct. 23 summit. Geithner said it’s “important for growth around the world that they deliver on the commitment” over the next several days and before the Group of 20 summit next month.

“We want to see the details,” Geithner said after a tour of Corning Inc.’s fiber-optics manufacturing plant. “Not just the objectives they’re trying to achieve, but we want to see the strategy and the details.”

European leaders today increased pressure on Italian Prime Minister Silvio Berlusconi to specify how he will reach budget- reduction targets as German lawmakers prepared to vote on a revamped euro-area bailout package that officials raced to complete before a summit tomorrow.

Italy Focus

The focus on Italy underscored a push by leaders to prevent the Greece-fueled debt crisis from swamping the third-biggest euro economy and piling risks onto France and Germany. Policy makers, pressed by politicians and investors around the world, are struggling to devise a plan that persuades markets they can stamp out the contagion.

Geithner said a European solution should include a substantial firewall, strengthen the financial system and reforms to support growth.

He called the crisis “one of the biggest challenges facing growth around the world.”

“A lot depends, a lot in the United States, a lot around the world depends on their ability to restore confidence and demonstrate that they have the capacity, not just the intention, but the capacity and the details of a specific plan to get ahead of this problem.”

Geithner was in North Carolina to promote President Barack Obama’s $447 billion jobs proposal, which includes $60 billion for roads, bridges and other infrastructure. He said aging infrastructure is like a tax on Americans.

Jobs Plan

“It’s very, very important we see Congress act,” Geithner said. Otherwise, “growth for the nation as a whole will be weaker.”

Senate Majority Leader Harry Reid has said he will seek a vote on the infrastructure measure. Democrats failed in their first attempt to move forward on a part of the overall jobs proposal. The Senate on Oct. 20 blocked a provision that would spend $35 billion to help prevent layoffs of public-sector employees.

Democrats began trying to pass the jobs proposal in pieces after the Senate blocked consideration of the full plan on Oct. 12.

--Editors: Kevin Costelloe, Christopher Wellisz

To contact the reporters on this story: Cheyenne Hopkins at Ian Katz in Washington at ikatz2@bloomberg.net.

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net


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