U.S. Treasury Secretary Timothy Geithner said on Wednesday that the global economy faces significant risks at the moment with the ongoing crisis in Europe and slowed growth in many major economies.
"It is still very challenging moment for the global economy," Geithner spoke to the Council on Foreign Relations, a Washington- based think tank.
"Europe is in the next stage of another major escalation" in their strategy to contain the crisis and build a stronger Europe, Geithner said.
He believed a banking union -- a commitment to a more integrated framework for supervision, for deposit insurance, and broader backstop of the financial system -- is one important policy change Europe needs in the near term. He deemed Spain's decision for more dramatic recapitalization of its banking system is "a good, concrete signal" toward broader banking union.
The Treasury Secretary said it is also important for Europe to have credible financial backstop in place for the countries that are undertaking reforms, by enabling them to borrow at affordable rates.
Meanwhile, Geithner mentioned the steps the debt-laden European countries can take to shift toward growth. He said the world would have a chance to hear what the European countries plan to do next at the upcoming group of 20 summit to be held in Los Cabos, Mexico, on June 18-19.
Geithner gave little details about his own view of the U.S. economic outlook. He said many forecasters predicted the growth would struggle around 2 percent.
"That growth is not strong enough to make a lot more progress getting more Americans back to work and bringing down the unemployment rate faster," he said, adding that if more things could be done, the United States would be in a stronger place to withstand the uncertainty caused by the protracted crisis in Europe.
Most Popular Stories
- Airport Garners Social Media Award
- Social Media Campaign Increases Organ Donor Registrations
- Cost of Health Care Slowing in U.S.
- World Bank: Rich Countries Must Curb Emissions
- Patriots' Aaron Hernandez Questioned in Slaying
- Microsoft Says XBox Is No Big Brother
- Intel Working on Smartwatch; Mum on Possible Apple Link
- Using Acids to Unlock Shale Oil OK, Regulator Says
- NHU, Canada College Partner on B.A. in Child Development
- Fed Will Keep Buying Bonds for Now; Markets Dip