Geithner Refutes EU President's Claim That U.S. Stimulus Plans Are a 'Way to Hell'
Treasury Secretary Pushes Back Against European Leader's Bold Charges
Treasury Secretary Tim Geithner dismissed scathing criticism today by European Union President Mirek Topolanek that the U.S.'s stimulus packages are a "way to hell" that will undermine the global financial market.
"No risk in that," Geithner said in an interview on CNBC. "The best thing we can do for the world economy, the best thing we can do for the fortunes of Americans, is to be aggressive in using the resources of the government to get this economy back on track.
"Of course, when we get recovery established, we're going to have to get ourselves back to the point where we have a stable fiscal position, and we're committed to do that," Geithner said.
Topolanek's confrontational comments to the European parliament mark the strongest international criticism of President Obama's stimulus plan yet and have created a ripple effect across Europe.
Topolanek is also the Czech prime minister, and the showdown came one day after his government collapsed because of a parliamentary vote of no-confidence.
Inconvenient Timing
This backlash comes at an inconvenient time for Obama, who plans to make his first trip to Europe as president next week. While abroad, the president hopes to work with the Group of 20 nations to reform the global financial markets as well as focus on the U.S. mission in Afghanistan.
Geithner has warned in the past that countries that move too slowly to combat economic crises run the risk of extending their recessions. Despite Topolanek's blast, the Treasury chief expressed confidence that major countries are committed to implementing stimulus plans to reverse the global downturn.
"There is more commitment to a greater level of stimulus across major economies than we've ever seen, more unanimity about what it's going to take, more commitment to do what is necessary," he said. "You're seeing, I think, very substantial stimulus in the pipeline across major economies."
Geithner Praises China's Efforts
Geithner today also expressed confidence in China's stimulus efforts and said the Chinese have the same faith in American efforts. Earlier this month, China's Premier Wen Jiabao had voiced concerns about the value of U.S. Treasury bonds.
"China is playing a very important stabilizing role in this financial crisis we're seeing globally," Geithner said. "The things they are doing to get their economy stronger, to encourage domestic demand growth, to allow further evolution in their basic financial framework -- those things are very important, consequential policies, and we're working very, very closely with them. I think they have a lot of confidence in the policies we're pursuing."
Geithner also stirred up currency markets today when he responded to calls by the head of China's central bank, Zhou Xiaochuan, for a new global reserve currency. Geithner, in remarks at the Council on Foreign Relations in New York, said he did not foresee any change in the role of the dollar, a point he reiterated to CNBC.
"I want to say this very clearly: A strong dollar is in America's interest," he said. "We're going to make sure we're pursuing policies that improve the long-term fundamentals of the U.S. economy."
In the short-term, Geithner also sounded an optimistic note in describing progress the administration has made in lifting the country out of its 15-month recession.
"We've seen a lot of adjustment across the economy, across the global economy," Geithner said. "You're seeing the pace of deterioration start to slow in some areas, and I think that's promising."
The Associated Press contributed to this story.
