Geithner warns EU against hasty growth measures

WASHINGTON, March 19 Mon Mar 19, 2012 5:51pm EDT

WASHINGTON, March 19 (Reuters) - U.S. Treasury Secretary Timothy Geithner said Europe was only at the initial stages of a long and difficult reform path and warned heavily indebted countries not to resort to draconian measures to boost their economies, according to congressional testimony released on Monday.

"Economic growth is likely to be weak for some time. The path of fiscal consolidation should be gradual with a multiyear phase-in of reforms," Geithner said in remarks prepared for delivery to the House Financial Services Committee on Tuesday.

"If every time economic growth disappoints, governments are forced to cut spending or raise taxes immediately to make up for the impact of weaker growth on deficits, this would risk a self-reinforcing negative spiral of growth-killing austerity," he said.

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