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WASHINGTON: US Treasury Secretary Timothy Geithner is set to urge key European officials to take decisive action next week at a make-or-break summit to prevent a debt crisis from turning into runaway contagion.
Treasury announced Geithner will meet French President Nicolas Sarkozy, new Italian Prime Minister Mario Monti, and Spanish Prime Minister Mariano Rajoy on his trip, scheduled for next week, which will include stops in Frankfurt, Berlin, Paris, Marseille and Milan.
At a briefing later, a senior Treasury official said President Obama had asked Geithner to make the trip and said he would be ready to offer insights and suggestions to the Europeans as they refine their own plans.
The official indicated that European countries had held discussions with the International Monetary Fund about providing bilateral loans that could be used to bolster its resources. But the senior Treasury official said the United States was not planning to make such loans to the IMF and said the lender's resources were adequate.
The official said Europe has resources to cope with its crisis but has to muster the political will to do so and to shore up its own firewall to keep the situation from infecting other larger economies.
Both Geithner and Obama have been vocal in warning that a wider crisis would hurt a still fragile US recovery. Geithner has urged Europe to eliminate the threat of “cascading defaults.”
