The United States is not considering additional contributions for an emergency European bailout fund, as Europe has the financial capacity to manage its sovereign debt crisis, according to Treasury secretary Timothy Geithner.
"Europe is a very rich continent that has the means to solve this on their own," Geithner told the House Committee on Government Oversight and Reform Wednesday. "We do not see the case for coming to Congress and asking for more (money)."
While Europe has made progress toward resolving its prolonged sovereign debt crisis, significant hurdles remain before the region is back to health. Specifically, Geithner warned European officials against overly austere spending cuts at a time of economic weakness.
"For economic reforms to work, policymakers in the Euro Area will have to be careful to calibrate the mix of financial support and the pace of fiscal consolidation," he said.
The U.S. economy still faces risks associated with the European debt crisis, but is facing headwinds in a stronger position than Europe, he told lawmakers.
"We will grow much faster in part because we are a younger country. The commitments to health and welfare we have made are much less generous. We have made unsustainable commitments but we have more room for maneuver," Geithner added.
by RTT Staff Writer
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