EU crisis, U.S. politics threats to economy: Geithner

Reuters News
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Posted: Sep 22, 2011 9:39 AM
EU crisis, U.S. politics threats to economy: Geithner

WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner said on Thursday that the European debt crisis and the political divisions in the United States were the biggest threats to the global economy.

Earlier this year, soaring oil prices and the Japan earthquake slowed economic growth substantially, but Geithner said those two "shocks" have started to fade.

"The two other clouds still over us are the European crisis and the deep concern that you can see across the world and around the country about whether the political system in the United States is up to the challenges we face," Geithner said before weekend meetings of the International Monetary Fund and the World Bank in Washington.

"Not just the near term challenges of supporting an economy still healing from crisis, but long-term challenges of growth and competitiveness and fiscal sustainability," he told an event sponsored by the National Journal news publication.

Geithner will meet with his counterparts from the Group of 20 economies where discussions about the European crisis and its impact on market confidence will be the focus.

Finance ministers from around the world are pressuring Europe to do more to contain the escalating debt crisis that has rattled global markets and the European financial system.

Geithner voiced confidence in Europe's ability to do so. "You're going to see them act with more force in the coming weeks and months," he said.

(Reporting by Rachelle Younglai; Editing by James Dalgleish)