Geithner to meet Trichet and Schaeuble in Germany

Reuters News
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Posted: Mar 21, 2011 3:01 PM

WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner will meet with European Central Bank and German finance leaders on Tuesday ahead of a European Union summit that will consider bolstering a rescue fund for debt-strapped bloc members.

Geithner will meet with European Central Bank President Jean-Claude Trichet and German Finance Minister Wolfgang Schaeuble during a brief trip to Frankfurt and Berlin, the Treasury said on Monday. He also will meet with German Bundesbank President Axel Weber while in Frankfurt on Tuesday morning.

The Treasury provided few details about Geithner's goals for the trip. It said in a statement that he will "discuss the global economic outlook and progress on international financial reform," along with enforcement of sanctions against Libya and Iran.

Following Geithner's meeting with Schaeuble in Berlin on Tuesday afternoon, the two finance ministers will hold a joint press conference, around 9:15 a.m. EST/14:15 GMT.

Geithner also will meet later with Rainer Bruderle, Germany's federal minister for economics and technology, before departing Germany in the evening. He is scheduled to testify before a U.S. House of Representatives appropriations subcommittee hearing on Wednesday afternoon.

Geithner told Congress last Thursday that European growth was trailing that of emerging-market countries and the United States, and said the region needed to do whatever was necessary to help its most indebted members.

"It is important that European leaders continue to make clear that they will do whatever is necessary to make sure that the affected countries and their banks have the financing they need to enable these programs to succeed," he said.

Berlin, with Paris' backing, wants euro-zone countries to agree to a competitiveness pact at a March 11 meeting in Brussels in exchange for boosting the scope and capacity of an emergency fund for bailing out countries cut off from the markets.

Berlin wants other members to pass legislation like its own limiting the size of their debts before the so-called Emergency Financial Stability Facility is expanded, an idea that some, like debt-laden Greece, oppose.

Financial markets are watching the EU drama closely, particularly Germany's reluctance to pour more money into a fund and the surprise announcement last week by the European Central Bank that it may raise interest rates this spring. That has heightened anxiety about Europe's ability to contribute to the global recovery.

(Reporting by David Lawder and Glenn Somerville; Editing by Dan Grebler)