Financial leaders gather for meeting
Sunday, March 15, 2009
HORSHAM, England -- U.S. Treasury Secretary Tim Geithner was the new guy in town, fresh-faced among a crowd of silver-haired finance ministers from the Group of 20 leading economies.
And some of them let him know it.
Geithner, like his host, British Treasury chief Alistair Darling, gave a positive assessment of the meeting at a country inn in southern England, praising the collective determination to act to counter the world recession.
But he also found emerging nations China, Brazil, Russia and India line up to lecture the United States along with Europe, telling them to develop "more balanced, proactive" policies to get the global economy back on track.
Meanwhile, European participants France and Germany said the U.S. had finally made a turn toward their way of thinking with more oversight for the hedge funds that flourished in New York and London but have run into trouble in the current market turmoil.
Geither said the final statement -- which backed off a U.S. push for more government spending -- showed "a very strong commitment by the leaders of the world's most important countries to move together, to do what is necessary to bring recovery back on track, and at the same time to begin the very important process of reform of the financial system."
Geithner, former president of the New York Federal Reserve and a former U.S. Treasury Department official dealing with international affairs, made his international debut as Treasury secretary earlier at a February gathering of Group of Seven finance officials in Rome.
Financial officials and markets around the world are waiting for Geithner to come up with details on U.S. solutions to fix the crisis of confidence in the American banking system that has paralyzed lending and could worsen a downturn that has already swept away company profits and thousands of jobs.
Brazilian Finance Minister Guido Mantega said there is an "urgency" for the U.S. to solve its banking problem.
"If they're going to be nationalized then go ahead, if they are going to be liquidated then go ahead. But if must be done quickly," he said after the meeting.
The U.S. has indicated it could use a mix of private and public money to deal with the unsellable assets burdening bank finances and deterring them from lending into the economy as they normally do. Geithner says the details are on the way.
Softer words -- but a larger effect -- came from Chinese Premier Wen Jiabao on Friday when his comments that he was "concerned about the safety" of U.S. bonds saw the dollar slip against the euro.
China is Washington's biggest foreign creditor, with an estimated $1 trillion in U.S. government debt. A weaker dollar would erode the value of those assets.
Geithner's message was that U.S. efforts to get its economy and banking system back on track were moving quickly and would be successful -- and that the U.S. supported more oversight for the global financial system.
He was quick to defend Obama's plans to lift the U.S. economy and pay off the massive public debt it is accumulating with stimulus spending programs.
He said the U.S. and China were on the same page after meetings with China's finance minister and the central bank governor.
"I think our objectives and approaches have much in common with each other, the U.S. and China today, that is true for our position relative to any other country in the room. And that itself is extraordinary," he said.
After assuring the Chinese, he also had to smooth ruffled feathers among European nations bridling at comments by U.S. presidential adviser Larry Summers that they weren't doing enough to stoke growth.
That seemed aimed at Germany which is reluctant to spend heavily -- and increase public debt -- to get its own reluctant consumers to start spending. German Finance Minister Peer Steinbrueck said he'd made it very clear to Geithner that Germany had launched stimulus programs, although he counted extra social welfare and unemployment benefits as part of that effort.