U.S. officials are quietly working behind the scenes to keep the European debt crisis in check. They are pushing foreign leaders to be more aggressive in calming markets and negotiating with other European leaders, The Washington Post reported.
One of the key proposals that Treasury Secretary Timothy Geithner pushed when the crisis began last year was the creation of a much larger rescue fund than the $50 billion originally considered. Such a small amount would have accelerated the crisis and something more like $500 billion was needed, officials told the Post.
Federal Reserve Chairman Ben Bernanke and New York Fed chief Bill Dudley also are working on the debt crisis issue, the officials told the Post. The behind-the-scenes effort is being undertaken so as not to provoke the European public.
Geithner’s long-standing relationships with European leaders have allowed him to phone European Central Bank President Mario Draghi personally and avoid the days-wasting diplomatic niceties that generally precede such contacts, the Post reported. Geithner’s relationship with European financial leaders goes back some 15 years.
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