US Treasury secretary Timothy Geithner is to make an unprecedented appearance at a meeting of euro-zone finance ministers this week with alarm about Europe’s debt crisis deepening in the world’s two economic heavyweights.
The US and China have both urged EU nations to stop the turmoil that is now threatening Italy from spreading.
Speaking at the World Economic Forum in Dalian the Chinese prime minister Wen Jiabao said: ‘The governments of all the countries must truly take responsibility and take care of their own affairs. The main developed countries must take responsible and effective fiscal policies to properly cope with the sovereign debt issues.’
But the clear message for Europe’s debtors to get their houses in order also came with an offer to help, though Wen did not say exactly how.
Germany’s Chancellor Merkel, President Sarkozy of France and the Greek Prime Minister George Papandreou are due to hold a conference call later because Athens has said it is just weeks away from defaulting.
Merkel has said Europe was doing everything in its power to stop that happening, but some in her ruling coalition are talking in terms of an orderly bankruptcy for Greece, or of the country giving up the euro – an option one economist predicted would lead to disaster in the rest of the euro zone.