DAVOS, Switzerland (Reuters) - U.S. Treasury Secretary Timothy Geithner pressed Europe on Friday to boost its bailout fund resources, citing the euro zone debt crisis and oil prices as the two main factors influencing the pace of the United States’ economic upturn.
The U.S. economy is growing at an annual rate of around 2-3 percent, Geither told the World Economic Forum in Davos, adding that it still faces big challenges to repair damage wrought by the financial crisis.
Earlier on Friday, euro zone finance officials voiced optimism at the Forum that key building International Monetary Fund could help support Europe through its debt crisis if the euro zone boosts its bailout funds, or “firewall,” he said.
“Our view is that the only way Europe is going to be successful in holding this together is for them to bring a stronger firewall and that is going to demand a bigger commitment,” Geithner told the Forum.
”If Europe is able and willing to do that we believe the IMF is ready to play a constructive role,“ he added. ”I think you’ll see the IMF (be) very supportive in those efforts but not as a substitute for blocks to resolve the sovereign debt crisis (that) are gradually fitting into place.
The health of U.S. business was better than expected, Geithner said, dismissing the suggestion that tighter regulations were hampering growth.
“Profitability across the US economy is very high,” he added. “What is holding the US economy back still is the aftershocks of the financial crisis and the fiscal pressure on governments.”
Turning to Iran, he said Washington’s drive to cut Iran’s oil exports was getting excellent support from Europe and that there were positive signs from China too.
“Even over the last 6 months you’re seeing a substantial intensification in (cutting) dependence on Iranian oil and my sense is also that China wants to be part of that effort because it is in China’s interests not to see Iran undo the delicate balance in the Gulf,” he added.
On his own future, Geithner reaffirmed that he would not expect to be asked to continue as Treasury chief if President Barack Obama wins re-election.
“Generally anybody who takes these jobs serves at the pleasure of the president,” he said.
“When he asked me to stay when I thought it was the right time to leave, I agreed to stay and I agreed I would stay to the balance of this term. He accepted that aspiration of mine, and that’s where it’s going to come out, I think.”
Geithner declined to say what he would do next: “That feels like a long way away.”
Reporting by Paul Carrel and Janet McBride; editing by Patrick Graham