September 17, 2011
The US Treasury secretary told Europe’s leaders to stop bickering and take control of the debt crisis that has brought “catastrophic risk” to financial markets.
In a blunt warning that reflected Washington’s growing concern, Timothy Geithner urged European leaders to halt a months-long clash with the European Central Bank and argued that the EU’s growing reliance on foreign lenders would imperil the bloc’s ability to control its own destiny.
“What is very damaging [in Europe] from the outside is not the divisiveness about the broader debate, about strategy, but about the ongoing conflict between governments and the central bank, and you need both to work together to do what is essential to the resolution of any crisis,” Mr Geithner said on the sidelines of a meeting of eurozone finance ministers in Wroclaw, Poland on Friday.
“Governments and central banks have to take out the catastrophic risk from markets… [and avoid] loose talk about dismantling the institutions of the euro,” he added.
Mr Geithner’s comments came as the Europe’s finance ministers agreed to withhold an €8bn loan payment to Greece, a move that could leave Athens scrambling to satisfy its lenders before it runs out of cash.
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