U.S. Treasury Secretary Timothy F. Geithner said he is encouraged by his discussions with European leaders on how to combat the continent’s debt crisis.
“A solution to this crisis in Europe has to be made in Europe,” Geithner told reporters at the Group of 20 nations summit today in Los Cabos, Mexico. Leaders at the summit discussed issues including trade, financial industry regulations and energy, “but the focus of the meetings was very much on the crisis in Europe and the broader challenges to economic growth,” he said.
With European Union leaders preparing to discuss the path to closer political and economic union at a summit in Brussels on June 28-29, G-20 leaders held their second straight summit dominated by the contagion from Europe. Geithner said the European meeting next week will be “critical.”
G-20 leaders prodded Spain to spell out details of its bank bailout as the deepening debt crisis in Europe exposed tensions among the world’s biggest economies. The officials “talked about how we need clarity on Spain’s application as soon as possible,” German Chancellor Angela Merkel said.
“We were encouraged by what we heard from European leaders today and by the broad focus of what we are seeing,” Geithner said.
European officials are trying to “design a framework” to form a “banking union” and ensure that countries including Spain and Italy can borrow money at “sustainable interest rates,” Geithner said.