Posted: Jun 19, 2012 4:54 PM
Updated: Jun 19, 2012 4:54 PM
LOS CABOS, Mexico (AP) Seeking to sooth global economic fears, U.S. officials said they were encouraged that European leaders appeared ready to undertake a more forceful response to the continent's crippling debt crisis while still focusing on much-needed growth.
Treasury Secretary Timothy Geithner, speaking Tuesday at the close of the Group of 20 summit, said Europe was nearing key decisions aimed at stabilizing the eurozone. Those steps, he said, include a stronger framework to strengthen the continent's financial system and helping countries like Spain and Italy borrow at sustainable interest rates.
"We're encouraged by what we heard from the European leaders today and by the broad focus around the world we're seeing to the need to strengthen economic growth," Geithner said.
Geithner spoke following President Barack Obama's private meeting Tuesday with the leaders of Britain, Germany, Italy, France, Spain and the European Union. The continent's leaders were to outline the specifics of their plans during a summit in Brussels next week, a meeting Geithner called "critical."
A senior U.S. official said Europe would offer a "more forceful response" than they have contemplated to date during the Brussels summit. The Obama official said the European strategy will be based around building more viable financial institutions over time but also economic growth measures in the short term, a step Obama has been urging for some time.
The official spoke on condition of anonymity to characterize private talks without trumping the formal comments of leaders.
While Obama, as leader of the giant but struggling U.S. economy, is central to the Europe talks, it is the continent's leaders, led by German Chancellor, Angela Merkel, who carry both the power and responsibility to stabilize a eurozone reeling from debt, banking and political problems.
Obama immersed himself in the economic talks Tuesday before meeting separately with Chinese President Hu Jintao and holding a news conference. He was to be back in Washington by the early hours of Wednesday, where a fierce re-election campaign and a slumping U.S. jobs market await him.
The leaders gathered on the Mexican coast seemed intent on sending the right signals to jittery markets and unhappy electorates. Merkel told reporters Tuesday that the European leaders present made a unified statement that they were willing to tackle their problems.
Still, European leaders were showing flashes that they have heard enough about their troubles, particularly from Americans.
"The eurozone has a serious problem, but it is certainly not the only imbalance in the world economy," Italian Prime Minster Mario Monti said Tuesday. He said the United States' own problems were mentioned in G-20 talks "by almost everybody, including President Obama."
Central to the G-20 debate is how nations can boost jobs and consumer demand without sinking deeper into debt. Obama has implored governments to spend and grow, not just cut.
Obama sent some upbeat signals during the summit amid a sense of global relief that Greece, based on new elections, would not renege on its bailout terms and ditch the euro currency.
Europe's ability to turn around its fortunes fast will have direct bearing on whether Obama wins a second term. The bigger the drag from abroad, the harder the job growth in the United States.
Obama said all countries must "make sure that we're contributing so that the economy grows, the situation stabilizes, confidence returns to the markets."
Although the foreign gatherings allow Obama to show off statesmanship, every day spent away from the U.S. and a direct focus on jobs in America quietly gives headaches to his campaign aides. While Obama was in Mexico, his Republican competitor, Mitt Romney, was campaigning in the American heartland, trying to pull Michigan from Obama's column.
Associated Press writer Michael Weissenstein contributed to this report.