* Europe's crisis a threat to rest of world
* Geithner says Europe moving too slowly
* Preparing for new push at G20 talks next week
(Recasts lead, adds quotes, background, comments on Wall
WASHINGTON, Oct 5 Europe needs to step up
efforts to control its debt crisis before it pulls the United
States and the rest of world into a renewed downturn, Treasury
Secretary Timothy Geithner urged on Wednesday.
Speaking at the Washington Ideas Forum in the downtown
Newseum, Geithner mixed praise and criticism of Europe as he
continued an ongoing effort to push its policymakers toward a
more forceful approach toward dealing with debt woes.
"Europe matters a lot to us. We don't want to see Europe
weakened by a protracted crisis. Europe understands that," he
said but left no doubt at his impatience with progress so far.
"They are moving too slowly," Geithner said. "Europe is a
large part of the global economy, and a severe crisis in Europe
would be damaging" around the world.
He sidestepped a question about how close the U.S. economy
might be sliding back into recession, however.
Asked whether he agreed with Federal Reserve Chairman Ben
Bernanke that U.S. growth was close to faltering, Geithner said
that growth is "slower, weaker" in the United States and around
the world than hoped at the start of the year.
Geithner has met European counterparts in France and in
Poland in recent weeks to push for stronger action, including
possible leveraging of an established European bailout fund, to
a debt crisis now raging in countries like Greece from
spreading to Bigger European economies.
He travels to Paris next week to again meet group of 20
finance ministers Oct 14-15 and is expected to pick up the
refrain that they must move faster and more convincingly to
persuade financial markets that governments are determined to
stop the crisis.
Geithner said he believed Europe has decided it will
"escalate substantially" its response, and he is confident that
they will do so.
"They have the financial resources as a continent that are
very large relative to this crisis. It is just a matter of
moving more quickly and more forcefully," he said.
"I expect they will do that."
Geithner avoided a direct response when asked whether he
supported the "Occupy Wall Street" protesters who have staged
continuing demonstrations against what they see as excessive
pay for bankers amid high rates of joblessness for young
Americans. He said he was sympathetic toward people who feel
they have lost a sense of future opportunities that use to be
plentiful in America.
Geithner was on the front lines dealing with the 2007-2009
financial crisis that drove the United States into recession --
first as president of the New York Federal Reserve Bank and
later as the Obama administration's Treasury chief.
He said the key lesson to be taken from battling crises is
that it is necessary to move strongly to quell them and then to
not let up before the problems are dealt with and growth can
"The basic problem and reason why governments make these
things harder over time is that what happens is the political
costs of the initial response is so difficult, so devastating
as you saw in the United States, that people tend to pull back
too early and leave the job unfinished," Geithner said.
(Reporting by Stella Dawson and Glenn Somerville, editing
by Diane Craft)