Geithner urges swifter EU action on debt crisis

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Geithner urges swifter EU action on debt crisis

Geithner urges swifter EU action on debt crisis
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EU finance ministers have rejected a call from Timothy Geithner, the US Treasury Secretary, to stump up more cash to bail out the bloc’s troubled economies.

Geithner urged European policymakers to increase the 440-billion-euro rescue fund in Wroclaw, Poland on Friday.

Belgian Finance Minister Didier Reynders said providing more stimulus to help the European economy would be the wrong course of action.

“We can achieve growth through structural reforms while continuing a policy of deficit reduction,” he said.

Geithner provided emergency support for banks after Lehman Brothers collapsed when he was serving as the head of the New York Federal Reserve.

He is said to be concerned that the EU is not speaking with one voice amid concerns over European banks’ exposure to the continent’s peripheral economies such as Greece.

In Berlin, German Chancellor Angela Merkel said on Friday that she opposed a Commission proposal to introduce so-called euro bonds.

That would see all 17 euro zone governments jointly guarantee each others’ debts so they can borrow at the same rates.

Germany is worried that could only provide a disincentive for indebted countries to get their finances in order.

A common euro bond would also push up Berlin’s borrowing costs, currently at their lowest levels since World War Two.