The financial crisis in Europe remains the central challenge to global economic growth and the EU must restore its financial stability quickly, U.S. Treasury Secretary Timothy Geithner said late on Thursday, according to RIA Novosti.
Geithner was speaking at the 21-nation Asia-Pacific Economic Cooperation conference in Hawaii.
The APEC countries are being strongly affected by the eurozone debt crisis and should take steps to strengthen domestic growth despite the pressure from Europe, Geithner said.
"As the U.S. 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,” he said.
Geithner said Europe was making progress, but encouraged European leaders to do more. "We just need to see them (markets) move more quickly and with more force behind it.”
The already grim situation in the eurozone worsened this week as yields on Italy’s benchmark 10-year sovereign bonds rose to a record 7.25 percent on Wednesday, above the 7 percent level that triggered bailout requests from Portugal, Ireland and Greece.
Italy`s state debt stands at about 1.9 trillion euros ($2.6 trillion). Many analysts suspect the county`s debt problem is simply too big to bail out. The announcements this week that Greek Prime Minister George Papandreous and Italy`s Prime Minister Silvio Berlusconi would resign, buoyed up the markets only temporarily.
Geithner also called on China to stop limiting the growth of its currency.
"China, in particular, must continue to allow its currency to strengthen, and China has acknowledged the importance of faster exchange rate adjustment.”
International Monetary Fund head Christine Lagarde has said earlier that China should soften its monetary policy in order to let the yuan strengthen, and boost domestic demand.
Russian President Dmitry Medvedev is to participate in the APEC meeting on November 12-13.