U.S. official: Europe remains “central challenge” to global growth

PanARMENIAN.Net - U.S. Treasury Secretary Timothy Geithner said Europe remains the “central challenge” to global growth and must “move quickly” to restore financial stability, The Telegraph reports.

Geithner, who is in Honolulu attending the 21-nation Asia-Pacific Economic Cooperation conference, said that the APEC countries are all directly affected by the Eurozone crisis and he encouraged them “to take steps to strengthen growth in the face of these pressures from Europe”.

European finance ministers earlier this week failed to bridge divisions over the European Stability Mechanism, a permanent rescue fund aimed at stemming the growing crisis over sovereign debt facing countries like Greece and Italy. The world economy is in a “dangerous phase”, IMF Managing Director Christine Lagarde said this week.

“As the United States continues to work through the problems that caused our crisis and Europe confronts a period of slower growth, Asian economies will need to do more to stimulate domestic demand growth - both so they are less vulnerable to slowdowns, such as the situation in Europe, and so they can continue to contribute to global growth,” Geithner said at a news conference today.

Geithner said concern over Europe dominated discussions in APEC meetings and hallway discussions. He didn’t point to ways the countries could assist Europe and instead remarked on how they could protect their own growth.

“These economies, including the United States, have the capacity to do things now to make growth stronger both to offset some of the pressures they’re facing in Europe but also because the world as a whole - even when Europe stabilizes you are going to see growth damaged by the magnitude of the crisis so far,” Geithner said. “So there is a very strong rationale in those economies that have the capacity to do it to act now to strengthen growth.”