WASHINGTON: Europe must build a "credible" firewall to contain the financial crisis before the United States and other countries agree to boost IMF intervention resources, US Treasury Secretary Timothy Geithner said Friday.
Geithner, in an interview ahead of the Group of 20 finance chiefs meeting in Mexico City, said Europe needs to have a firewall that is "bigger than they have today."
"It needs to be big enough to make credible the commitment that you've heard from leaders of Europe that they're going to hold this together," he said.
The European Union is seeking at the G20 meeting to gain support for an additional $500 billion of intervention resources for the International Monetary Fund.
The main aim of the money would be to help stanch any more eurozone-linked outbreaks of panic in the markets and the impact of those on bystander nations.
But a number of countries, the United States in particular, are known to be resistant to adding to the IMF's funds.
Geithner told CNBC television that steps taken so far have had "significant impact in reassuring the world that Europe is not going to make a catastrophic mistake in allowing a financial crisis to engulf the continent."
"What we don't want to see is the IMF substitute -- and it really cannot substitute -- for a stronger European response."
"Most countries around the world have the same view we do," he added.
"I want to be fair to the Europeans, they've done a lot, and they are making literally quite a lot of progress, but they've got more work to do," he said.
"Until we see that, I think it's unlikely that you'll see the major shareholders of the IMF be prepared to have the IMF play a larger response."
indiatimes.com
Geithner, in an interview ahead of the Group of 20 finance chiefs meeting in Mexico City, said Europe needs to have a firewall that is "bigger than they have today."
"It needs to be big enough to make credible the commitment that you've heard from leaders of Europe that they're going to hold this together," he said.
The European Union is seeking at the G20 meeting to gain support for an additional $500 billion of intervention resources for the International Monetary Fund.
The main aim of the money would be to help stanch any more eurozone-linked outbreaks of panic in the markets and the impact of those on bystander nations.
But a number of countries, the United States in particular, are known to be resistant to adding to the IMF's funds.
Geithner told CNBC television that steps taken so far have had "significant impact in reassuring the world that Europe is not going to make a catastrophic mistake in allowing a financial crisis to engulf the continent."
"What we don't want to see is the IMF substitute -- and it really cannot substitute -- for a stronger European response."
"Most countries around the world have the same view we do," he added.
"I want to be fair to the Europeans, they've done a lot, and they are making literally quite a lot of progress, but they've got more work to do," he said.
"Until we see that, I think it's unlikely that you'll see the major shareholders of the IMF be prepared to have the IMF play a larger response."
indiatimes.com
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