Tags: Geithner | Political | Dysfunction | economic

Geithner: ‘Political Dysfunction’ Fueling Global Woes

Wednesday, 14 Sep 2011 11:58 AM

Political problems are blocking the world from solving economic issues plaguing most major economies and are stalling a return to more robust growth, says U.S. Treasury Secretary Timothy Geithner.

"You have this terribly damaging political dysfunction here and in Europe that leaves the world wondering whether the political system has the capacity to do the right thing," Geithner tells a CNBC conference.

"That is very damaging to confidence."

In Europe, where debt scares in Greece are threatening to spread and infect banking systems there and elsewhere, authorities will likely navigate the continent out of the crisis, Geithner says, adding there is "not a chance" Europe will experience something like the Lehman Brothers collapse, which bruised the U.S. banking system.

"We have an interest in helping them through this, but this is their challenge and they have the economic and financial capacity to meet this challenge," Geithner says.

"The people who think this is beyond their (ability) are mistaken."

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Timothy Geithner
(Getty Images photo)
Economists worry that a default in Greece would prompt other eurozone countries to default on their debts, which could hurt European and U.S. banks exposed to European debt.

European Commission President Jose Manuel Barroso has said authorities are mulling the sale of euro area bonds, although Germany and other north European creditor states oppose that idea.

"Today I want to confirm that the commission will soon present options for the introduction of eurobonds. Some of these could be implemented within the terms of the current treaty, and others would require treaty change," Barroso says, according to Reuters.

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Political problems are blocking the world from solving economic issues plaguing most major economies and are stalling a return to more robust growth, says U.S. Treasury Secretary Timothy Geithner. You have this terribly damaging political dysfunction here and in Europe...
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2011-58-14
Wednesday, 14 Sep 2011 11:58 AM
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