Offering a positive outlook on the crisis in Europe, the U.S. Treasury Secretary Timothy F. Geithner said Friday that he is confident that Europe has the ability to successfully tackle its financial crisis.
In an interview to Bloomberg Television, Geithner stated, “They have the capacity to make that program work, I think they're committed to do it. I'm very confident they have the ability to do that and if they handle that well, then we have a very good chance of seeing the world economy continue to show these very promising signs of growth."
$1 trillion package to rescue Europe
Last week the European Union, International Monetary Fund, and the central bankers collected $1 trillion as bailout funds to rescue Greece and other countries in the region.
Greece is mired in financial crisis. Its deficit is 13 percent of its gross domestic product (GDP) and its debt, which totals to 300 billion euros, is 124.9 percent of GDP.
According to Geithner, the $1 trillion package will definitely help Europe in tackling the crisis and reducing the budget deficits of various counties.
The treasury secretary is also hopeful that China will raise the value of Yuan against dollar. Of late, China has come under intense criticism from Washington for intentionally devaluing its currency in order to boost exports.
U.S. untouched by Europe crisis
Apart from being confident that Europe will stem the turmoil, Geithner added that he is certain that the crisis will not affect the United States.
He stated, “Our economy is getting stronger. We're seeing a lot of strength, improvement and confidence.”
Geithner further said that the U.S. economy is recovering from the downturn at a much faster pace than initially anticipated.
Geithner hopeful of yuan’s appreciation
The treasury secretary is also hopeful that China will raise the value to Yuan against dollar. Of late, China has come under intense criticism from Washington for intentionally devaluing its currency in order to boost exports.
The country has devalued yuan at around 6.83 per dollar since the start of the global financial crisis in 2008 to prevent itself from being affected by the economic downturn, claims United States.
But China has refuted these claims, saying that it has kept yuan stable in order to help global rebalancing.
Geithner is expected to meet Chinese Vice Premier Wang Qishan on May 24-25 in Beijing and is confident that China will let their exchange rate to “gradually reflect market forces."