U.S., Germany stress need for co-operation in euro crisis
U.S. Treasury Secretary Timothy Geithner and his German counterpart are stressing the need for "ongoing international co-operation and co-ordination" in the face of the eurozone debt crisis and faltering global growth.
Geithner and Wolfgang Schaeuble issued a joint statement Monday after holding informal talks on the German North Sea island of Sylt, where Schaeuble is vacationing.
The two finance chiefs expressed confidence in the reforms put in place by the 17 members of the crisis-hit eurozone.
The statement says the two countries will "continue to co-operate closely" to stabilize the international economy.
After the meeting, which Germany says was initiated by the U.S., Geithner will travel to Frankfurt to meet ECB President Mario Draghi.
Markets surged after Draghi said last Thursday that the ECB would do "whatever it takes" to preserve the euro. Over the following days, the leaders of Germany, France and Italy also said they would do all they can to protect the 17-country currency union.
Though they didn't pledge any specific action, the comments raised expectations that the ECB might step in to buy Spanish and perhaps Italian government bonds to lower the countries' borrowing costs, which have been worryingly high in recent weeks.
Another possibility might be for the eurozone's temporary rescue fund, the European Financial Stability Facility, to buy bonds.
In an interview with Monday's edition of the German daily Sueddeutsche Zeitung, Jean-Claude Juncker — the Luxembourg prime minister who chairs meetings of the eurozone finance ministers, or eurogroup — said that officials have no time to lose and will decide in the coming days what measures to take.
Juncker said the rescue fund and eurozone countries would co-ordinate with the ECB — "and we will, as Draghi says, see results."
But he also said: "It still has to be decided what exactly we will do when. That depends on the developments of the coming days and how fast we have to react."
Asked what exactly was meant by German Chancellor Angela Merkel's joint statements with her French and Italian counterparts, German government spokesman Georg Streiter said Monday: "It is the intention of all simply to send a very strong signal for the euro."
He also highlighted Juncker's comment that what will be done — and when — still has to be decided.
Streiter didn't talk about any specific action, other than to make clear that Germany still opposes any move to pool government debt, for example through jointly issued eurobonds.
Previous bond purchases by the ECB haven't been popular in Germany, where some worry that they go beyond the central bank's mandate.
Without commenting directly on the possibility, Streiter said that "the German government has full confidence in the ECB."