U.S. Puts Pressure on Euro Zone Leaders

Mr. Geithner calls on the Euro zone leaders to lower troubled members’ borrowing costs. Geithner says that, “bringing down interest rates in countries that are reforming and making sure those banking systems can provide the credit those economies need,” are what the European leaders should be focusing on.

Well, if anyone out there knows what an economy needs, it is definitely Timothy Geithner. Just look at how great of a job he has done getting our economy here at home up and running again…oh wait…actually – no. Last time I checked, our economy was still circling down the drain.

Mr. Geithner’s comments were taped on Tuesday (aired nationwide on Wednesday) in an interview with Bloomberg Television, the day after he flew to Germany to get with Finance Minister Wolfgang Schaeuble and European Central Bank President, Mario Draghi. With the euro zone’s third and fourth largest economies, that of Italy and Spain, at risk of losing their access to credit market, Europe is in quite the pickle. Investors are holding their bonds instead of moving towards the German debt, which has gotten so massive that it is not going to be able to sustain itself long-term.

Euro zone leaders are scrambling helter-skelter to try and save their currency instead of just accepting their situation as it is. Draghi said last week that the European Central Bank would take whatever steps necessary to preserve the euro. Those remarks gave way to speculation that the ECB’s policy-setting Governing Council monthly meeting, on Thursday, may take a more radical approach in assessing the problem.

Schaeuble and Draghi informed our Treasury Secretary of their situation and the plans they mean to put in place to attempt to resolve them, “attempt” being the key word, here.

Geithner warned that the euro zone would not see immediate action. He explained that judging by financial crises of the past, the longer the leaders take deciding what to do, the more money those disasters end up costing. “I believe they understand that,” Geithner said, “That’s why they’ve signaled they are prepared to move further. Now again, this is going to take time.”

This crisis has gone on for months, and was years in the making. From the beginning, leaders panicked and insisted that if action were not taken immediately, the consequences would be catastrophic.

Well, a lot of time has passed since then, and the only thing it seems that the leaders can agree on is that the circumstances are bad. For most of the Euro zone economies, their decision is simple—act. Do whatever it takes, meaning bailouts, borrowing, and the list goes on. But for Germany, who stands to take on its surrounding nations’ debts if they should default, things are far more complicated.

Perhaps Mr. Geithner’s advice would bear more standing if he had done a better job managing his own country’s economy. As it stands, his advice has little significance for the failing European nations.