U.S. Treasury Secretary Timothy Geithner said the global recovery remains fragile, given continued risks from the euro area and higher oil prices.
Nonetheless, the U.S. economy continues to gather strength, he said in Washington on Saturday in a statement to the International Monetary Fund's policy steering committee.
He welcomed measures taken by European leaders in recent months to strengthen their crisis response and reduce financial stress.
"The success of the next phase of the crisis response will hinge on Europe's willingness and ability, together with the European Central Bank (ECB), to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of markets," Geithner said.
Yesterday, G20 Finance Ministers and Central Bank Governors reached an agreement to lift the funding resources of the International Monetary Fund by over $430 billion as the Eurozone debt crisis dent global growth.
"The IMF can and should play a complementary role in a comprehensive and well-designed European response," said Geithner.
He noted that oil prices present a risk to global growth. Higher oil prices strain household budgets and weigh against private sector demand growth. "It is important that we remain vigilant to the risks of supply disruptions and their effect on economic growth," Geithner added.
by RTT Staff Writer
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