SALON

Monday, Jul 30, 2012 4:15 PM UTC

US, Germany stress cooperation to end euro crisis

U.S. Treasury Secretary Timothy Geithner met with the German Finance minister to discuss the euro debt crisis

By

Topics: From the Wires,

US, Germany stress cooperation to end euro crisisGerman Finance Minister Wolfgang Schaeuble, left, speaks with U.S. Treasury Secretary Timothy Geithner, right, in the house where Schaeuble is vacationing, in Westerland on the North Sea island of Sylt, Germany Monday July 30, 2012. (AP/ Philipp Guelland)

BERLIN (AP) — U.S. Treasury Secretary Timothy Geithner and his German counterpart stressed the need for coordinated action Monday in the face of the eurozone debt crisis and faltering global growth, but left open what joint steps Europe and the United States would take to shore up the world economy in the coming months.

Geithner traveled to the German North Sea island of Sylt for informal talks with Finance Minister Wolfgang Schaeuble, before heading on to meet Mario Draghi, the president of the European Central Bank, later Monday.

Geithner and Schaeuble praised efforts by Ireland, Portugal, Spain and Italy to turn their debt-ridden economies around, and voiced optimism about economic reforms meant to deepen integration among the 17 eurozone members.

The joint statement made no reference to Greece, which has struggled to implement the reform package agreed with its creditors. The country faces the possibility a chaotic exit from the common currency area if it fails to meet its bailout conditions.

Geithner and Schaeuble “emphasized the need for ongoing international cooperation and coordination” and stated that the U.S. and Germany would “continue to cooperate closely with their partners when advancing the policy agenda in autumn to further stabilize global and European economies.”

The U.S. treasury secretary was later scheduled to head to Frankfurt for a meeting with ECB President Mario Draghi.

Markets surged after Draghi said last Thursday that the ECB would do “whatever it takes” to preserve the euro. Over the following days, the leaders of Germany, France and Italy also said they would do all they can to protect the 17-country currency union — comments that Geithner and Schaeuble’s “took note of,” according to their statement.

Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University, said the joint Geithner-Schaeuble statement did not offer any new solutions for the European debt crisis.

“The statement doesn’t contain anything new,” Sohn said. “What is important is not the joint statement but what the two officials might have discussed behind the scenes.”

Sohn said that it was very likely that Geithner sought during his one-day visit to Europe to strongly encourage the Europeans to move more aggressively to deal with their debt problems.

“The U.S. economy is getting worse and the main drag on our economy right now is coming from Europe,” Sohn said. “Geithner is trying to get the Europeans to move in the right direction.”

Sohn said, “This is an election year and the Obama administration really can’t do much at home to boost the economy given all the constraints at the moment.”

Though the leaders didn’t pledge any specific action, the comments raised expectations that the ECB might step in to buy Spanish and perhaps Italian government bonds to lower the countries’ borrowing costs, which have been worryingly high in recent weeks. Another possibility might be for the eurozone’s temporary rescue fund, the European Financial Stability Facility, to buy bonds.

In an interview with Monday’s edition of the German daily Sueddeutsche Zeitung, Jean-Claude Juncker — the Luxembourg prime minister who chairs meetings of the eurozone finance ministers, or eurogroup — said that officials have no time to lose and will decide in the coming days what measures to take.

Juncker said the rescue fund and eurozone countries would coordinate with the ECB — “and we will, as Draghi says, see results.” But he also said: “It still has to be decided what exactly we will do when. That depends on the developments of the coming days and how fast we have to react.”

Asked what exactly was meant by German Chancellor Angela Merkel’s joint statements with her French and Italian counterparts, German government spokesman Georg Streiter said Monday: “It is the intention of all simply to send a very strong signal for the euro.” He also highlighted Juncker’s comment that what will be done — and when — still has to be decided.

Streiter didn’t talk about any specific action, other than to make clear that Germany still opposes any move to pool government debt, for example through jointly issued eurobonds.

Previous bond purchases by the ECB haven’t been popular in Germany, where some worry that they go beyond the central bank’s mandate. Without commenting directly on the possibility, Streiter said that “the German government has full confidence in the ECB.”

___

Martin Crutsinger in Washington contributed to this report.

Frank Jordans

More Frank Jordans.

You Might Also Like

More Related Stories

Featured Slide Shows

7 motorist-friendly camping sites

close X
  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 9

Sponsored Post

  • White River National Forest via Lower Crystal Lake, Colorado
    For those OK with the mainstream, White River Forest welcomes more than 10 million visitors a year, making it the most-visited recreation forest in the nation. But don’t hate it for being beautiful; it’s got substance, too. The forest boasts 8 wilderness areas, 2,500 miles of trail, 1,900 miles of winding service system roads, and 12 ski resorts (should your snow shredders fit the trunk space). If ice isn’t your thing: take the tire-friendly Flat Tops Trail Scenic Byway — 82 miles connecting the towns of Meeker and Yampa, half of which is unpaved for you road rebels.
    fs.usda.gov/whiteriveryou


    Image credit: Getty

  • Chattahoochee-Oconee National Forest via Noontootla Creek, Georgia
    Boasting 10 wildernesses, 430 miles of trail and 1,367 miles of trout-filled stream, this Georgia forest is hailed as a camper’s paradise. Try driving the Ridge and Valley Scenic Byway, which saw Civil War battles fought. If the tall peaks make your engine tremble, opt for the relatively flat Oconee National Forest, which offers smaller hills and an easy trail to the ghost town of Scull Shoals. Scaredy-cats can opt for John’s Mountain Overlook, which leads to twin waterfalls for the sensitive sightseer in you.
    fs.usda.gov/conf


    Image credit: flickr/chattoconeenf

  • Nordhouse Dunes Wilderness Area via Green Road, Michigan
    The only national forest in Lower Michigan, the Huron-Mainstee spans nearly 1 million acres of public land. Outside the requisite lush habitat for fish and wildlife on display, the Nordhouse Dunes Wilderness Area is among the biggest hooks for visitors: offering beach camping with shores pounded by big, cerulean surf. Splash in some rum and you just might think you were in the Caribbean.
    fs.usda.gov/hmnf


    Image credit: umich.edu

  • Canaan Mountain via Backcountry Canaan Loop Road, West Virginia
    A favorite hailed by outdoorsman and author Johnny Molloy as some of the best high-country car camping sites anywhere in the country, you don’t have to go far to get away. Travel 20 miles west of Dolly Sods (among the busiest in the East) to find the Canaan Backcountry (for more quiet and peace). Those willing to leave the car for a bit and foot it would be remiss to neglect day-hiking the White Rim Rocks, Table Rock Overlook, or the rim at Blackwater River Gorge.
    fs.usda.gov/mnf


    Image credit: Getty

  • Mt. Rogers NRA via Hurricane Creek Road, North Carolina
    Most know it as the highest country they’ll see from North Carolina to New Hampshire. What they may not know? Car campers can get the same grand experience for less hassle. Drop the 50-pound backpacks and take the highway to the high country by stopping anywhere on the twisting (hence the name) Hurricane Road for access to a 15-mile loop that boasts the best of the grassy balds. It’s the road less travelled, and the high one, at that.
    fs.usda.gov/gwj


    Image credit: wikipedia.org

  • Long Key State Park via the Overseas Highway, Florida
    Hiking can get old; sometimes you’d rather paddle. For a weekend getaway of the coastal variety and quieter version of the Florida Keys that’s no less luxe, stick your head in the sand (and ocean, if snorkeling’s your thing) at any of Long Key’s 60 sites. Canoes and kayaks are aplenty, as are the hot showers and electric power source amenities. Think of it as the getaway from the typical getaway.
    floridastateparks.org/longkey/default.cfm


    Image credit: floridastateparks.org

  • Grand Canyon National Park via Crazy Jug Point, Arizona
    You didn’t think we’d neglect one of the world’s most famous national parks, did you? Nor would we dare lead you astray with one of the busiest parts of the park. With the Colorado River still within view of this cliff-edge site, Crazy Jug is a carside camper’s refuge from the troops of tourists. Find easy access to the Bill Hall Trail less than a mile from camp, and descend to get a peek at the volcanic Mt. Trumbull. (Fear not: It’s about as active as your typical lazy Sunday in front of the tube, if not more peaceful.)
    fs.usda.gov/kaibab


    Image credit: flickr/Irish Typepad

  • As the go-to (weekend) getaway car for fiscally conscious field trips with friends, the 2013 MINI Convertible is your campground racer of choice, allowing you and up to three of your co-pilots to take in all the beauty of nature high and low. And with a fuel efficiency that won’t leave you in the latter, you won’t have to worry about being left stranded (or awkwardly asking to go halfsies on gas expenses).


    Image credit: miniusa.com

  • Recent Slide Shows

  • Share on Twitter
  • Share on Facebook
  • Thumbnails
  • Fullscreen
  • 1 of 9

Related Videos

Comments

 0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>

follow salon

Most Read

Popular on Reddit

links from salon.com

From Around the Web

Presented by Scribol
listener_new_rect The Listener: "The Joker": Laughing at life's deepest sorrows