Geithner sees encouraging progress in Europe

[December 07, 2011]  PARIS (AP) -- U.S. Treasury Secretary Timothy Geithner said Wednesday he is very encouraged with the progress Europe is making in coming up with a plan to shore up the euro in the wake of a crippling debt crisis.

Geithner's comments to reporters followed a meeting with French Finance Minister Francois Baroin on the second day of his whirlwind trip through Europe.

At a summit on Friday, Europe's leaders will discuss proposals made by France and Germany to impose greater budget discipline on the 17 nations that use the euro as a common currency.

Baroin said he and Geithner had spoken about building a "robust firewall" to reassure financial markets. Baroin also said they had also discussed greater involvement by the International Monetary Fund in resolving the debt crisis.

European countries have been pushing for more support for the IMF, which is already helping in the financial bailouts of Greece, Ireland and Portugal. But the United States has previously said that the IMF has adequate resources following a big increase in its financial firepower following the 2008 financial crisis.

However, U.S. officials have said they were reviewing a European proposal that some European governments would loan the IMF money that the agency could use to make loans to countries facing financial problems.

Geithner did not comment directly on Baroin's remarks about increasing IMF support but he called their meeting a "good, constructive" discussion.

"We are very encouraged with the progress that is being made," Geithner said.

Earlier, China also expressed support for the current outlines of the plan and offered to work with European governments.

"China always supports the development of European integration as well as efforts by the European Union to resolve the debt crisis," Foreign Ministry spokesman Hong Lei said at a daily media briefing. "We're ready to work with the international community to prevent turbulence in international financial markets and the world economy and promote a return to growth."

Geithner said a successful resolution of the European debt crisis is very important to the United States and the global economy.

Geithner met with Baroin in advance of discussions later with French President Nicolas Sarkozy.

On Tuesday, he began his three-day trip with meetings in Germany with Mario Draghi, the new head of the European Central Bank, and with German Finance Minister Wolfgang Schaeuble.

He is due to wrap up his trip with a meeting with new Italian Premier Mario Monti in Milan on Thursday.

[Associated Press; By MARTIN CRUTSINGER]

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