Economic crisis: US seeks strong plan from Europe

The US Treasury Secretary, Mr Tim Geithner, called on Europe to come up with a “strong plan” to rescue the global economy and urged Asia to do more to help restore world growth.

After hosting a meeting of Asia-Pacific finance ministers in Hawaii, Mr Geithner said talks had been dominated by how to make growth more balanced and sustainable in the future given the crisis unfolding in Europe.

“We are all directly affected by the crisis in Europe, but the economies gathered here are in a better position than most to take steps to strengthen growth in the face of these pressures from Europe,” he said.

“The crisis in Europe remains the central challenge to global growth. It is crucial that Europe move quickly to put in place a strong plan to restore financial stability.”

Mr Geithner had a stark message for leaders gathering in Honolulu for the Asia-Pacific Economic Cooperation (APEC) forum.

“As the United States continues to work through the problems that caused our crisis and Europe confronts a period of slower growth, Asian economies will need to do more to stimulate domestic demand growth — both so they are less vulnerable to slowdowns, such as the situation in Europe, and so they can continue to contribute to global growth.”

APEC’s 21 member economies account for about 40 per cent of the world’s population, more than 50 per cent of its gross domestic product and 44 percent of global trade.

“While APEC economies are the most vulnerable to a global slowdown, they can also play the greatest role in contributing to the global recovery and establishing the foundations of strong, sustainable, and balanced future growth,” Mr Geithner said.

Europe warned yesterday that the debt crisis was dragging the region towards a new recession as Greece chose a new prime minister to try to pull it back from the brink of financial disaster.

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