November 15, 2011 Geithner ~ speaking at the Wall Street Journal CEO Summit ...
Washington, While refusing to enter the debate whether the European Central Bank should be the lender of last resort to European countries, U.S. Treasury Secretary Tim Geithner told a group of CEOs Tuesday a lot more can be done.
“It’s not rocket science,” Geithner said of the ECB’s options in the current situation, speaking at the Wall Street Journal CEO Summit.
“There are lots of ways for the central bank to play a more effective supportive role in resolving this without violating the obvious constraints we respect here,” he said.
“The alternative is uncomfortable,” he continued, “as you’re seeing. It’s very hard to get the thing to work if you don’t figure out a way for those instruments to work together.”
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Europe believes, he said, that in five years the euro zone will have the same membership. He said he would not comment on what he believed.
The U.S. he said, is in better shape than Europe. “Even with all our challenges — and we still face really formidable challenges as a country.
I really believe we’re in a much stronger position today,” Geithner said, “to deal with what is still a challenging world because we did some very hard and very tough things early to put out the worst of the financial fires, to force a huge amount of private capital back into the financial system.”
Underlining a contrast between Europe and the United States, World Bank President Robert Zoellick, who spoke after Geithner, said he remembered thinking in Cannes at the G20 that he never wanted the United States to find itself in the position of Europe at that meeting, trying to find answers and define its future.
Zoellick said Europe is experiencing “slow motion runs,” and “liquidity withdrawal” that will have increasingly dire ramifications.
Geithner said the administration’s mortgage remediation programs, although helping, he said, hundreds of thousands of people, “will not substitute for Congress taking action” and helping the economy grow in the short term. Housing can’t lift the economy, he said. The economy will eventually have to lift housing.
Europe, he said, “has to figure out a way to enough political support for what has to happen and to try to do it as quickly as possible so they don’t continually fall behind the curve of the market.”
“This is absolutely within Europe’s capacity to solve,” he said.
“We’ve been significantly affected as has growth around the world by the pressures in Europe,” Geithner said, and so have to “pay a lot of attention to where they’re making progress and where they’re not.”
There have been moments, he said, that European officials have used American officials “to use us to help resolve some of the internal difficulties.”
“This is Europe’s challenge, Europe’s crisis,” he said.“Fundamentally the resolution is going to depend on the choices they make going forward.”
On China, Geithner repeated that although he believes government officials see that it is in their own interest to appreciate their currency, that they still are moving fast enough.
He also wouldn't speculate on whether the congressional deficit panel might reach a deal, but he said he was hopeful a compromise would be reached.
"I remain hopeful that we'll get there," he said.
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