Charles Collyns, assistant U.S. Treasury secretary for international finance, said parts of the euro area are economically fragile and could cause problems for other countries.
“The situation in the periphery of the eurozone remains a worrying source of fragility that could have damaging spillovers within and beyond Europe’s boundaries,” Collyns said in remarks prepared for a speech in Washington today.
Collyns also said China’s policies keep its currency, the yuan, “substantially undervalued.”
“China still closely manages the level of its exchange rate and restricts the ability of capital to move in and out of the country,” Collyns said. China’s policies “impose heavy costs on other emerging economies that run more flexible exchange rates.”