WILMINGTON, N.C. Oct 25 Top U.S. Treasury
Department officials on Tuesday urged European leaders to come
up with a definitive plan for dealing with their debt crisis
because it is a threat to global growth.
"We want to see, like the world wants to see ... the
details, not just the objectives," Treasury Secretary Timothy
Geithner said after touring a North Carolina fiber optics
"I think they are saying all the right things, they're
moving with a greater sense of urgency, that's all welcome,"
Geithner said, adding: "But until we see what they come
together with, it's hard to evaluate."
European leaders are to meet on Wednesday with the aim of
agreeing to a plan to reduce Greece's debt burden, fortify
European banks to withstand bond losses, and scale up the euro
zone rescue fund to prevent market contagion.
But as of late Tuesday, negotiations still were under way
over how to reduce Greece's debt to private sector bondholders
and on the size of a planned bank recapitalization and the best
way to leverage a rescue fund.
Earlier, Treasury's assistant secretary for international
affairs, Charles Collyns, testified before Congress that
European leaders will need to move swiftly to implement
whatever measures they settle on.
"This agreement will need to be implemented quickly and
firmly," Collyns said, adding that uncertainty stemming from
the unresolved crisis was hurting business and consumer
confidence and jeopardizing credit availability.
Geithner toured a Corning Inc. plant before meeting the
press, on a one-day trip that aimed to build support for
passage of all or parts of a job-creating package that stalled
in the Senate. He said it would create construction jobs
updating roads, rail, bridges and other infrastructure.
Appearing before the U.S. House of Representatives'
Financial Services subcommittee, Collyns said the U.S.
financial system's direct exposure to European countries under
most stress was moderate.
But he said there was cause for concern because of
extensive trade and investment ties with Europe.
"While direct exposure to the eurozone periphery is very
limited, U.S.. banks' exposures to the core European banks are
much larger and these banks are the primary international
lenders to peripheral European borrowers," Collyns noted.
In response to questions, Geithner played down the idea
that flat rate income tax could be fairer to Americans and be
an economic stimulant. Republican presidential hopeful Rick
Perry has proposed a 20 percent flat tax but also said people
could have a choice: pay 20 percent tax or keep their current
"At their core, these plans have the feature of shifting
the burden substantially from upper income Americans to the
less fortunate, to the middle class," Geithner said.