Times 2

US steps up pressure for Eurozone 'firewall'

WASHINGTON, Sept 24, (AFP) - The United States ramped up pressure on Europe to take swift action to contain the eurozone debt crisis, warning that the entire global economy is at stake. “Sovereign and banking stresses in Europe are the most serious risk now confronting the world economy,” US Treasury Secretary Timothy Geithner said in a speech to the International Monetary Fund's steering body.

“Further action to expand the effective capacity of these commitments is still necessary to create a firewall against further contagion,” Geithner said, according to the prepared text. The eurozone debt crisis, and Europe's widely criticized approach to handling it, have dominated the discussions at the annual IMF-World Bank meeting this week in Washington.

Addressing the International Monetary and Financial Committee (IMFC), Geithner said that the 17 nations sharing the euro had made “impressive” commitments to each other in the past 18 months, but a more coordinated effort is needed.

“While it is crucial that countries in the periphery undertake real reforms and demonstrate fiscal discipline, these efforts will take time.”Geithner called for European governments to work alongside the European Central Bank to show an “unequivocal commitment” to prevent the debt problems of Greece, Ireland and Portugal from causing a global meltdown.

The governments and ECB must work to “ensure nations with sound fiscal policies have affordable financing, and to ensure that European banks have recourse to adequate capital and funding to win the full confidence of their depositors and creditors,” he said. Developing countries at the meetings in Washington also expressed worries that their economies would be hit badly if Europe failed to get a grip on its problems.

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