Remarks by Treasury Secretary Geithner
Los Cabos, Mexico
2:33 P.M. MDT
SECRETARY GEITHNER: We're encouraged by what we've heard from the European leaders today and by the broad focus around the world we're seeing to the need to strengthen economic growth.
The leaders of the G20 met here at obviously what's a challenging time for the global economy, and this matters a lot to the United States because, because of the crisis in European and the softness you're seeing in growth outside Europe, that means that in the U.S. we're not growing as fast as we need to grow.
Now, the leaders today discussed a broad range of reforms and priorities. They reviewed progress on trade, on development, on financial reform and energy. But the focus of the meetings were very much on the crisis in Europe and these broader challenges to economic growth.
And the leaders in Europe are working towards the summit they have at the end of next week. It's going to be really a critical summit for them. And what they're trying to do is to design a framework to not just make Europe stronger for the future with reforms to build a stronger set of institutions for fiscal union -- banking union -- that's the way they describe it -- not just to make sure these economic reforms work over time to strengthen growth in Europe, but what they're also trying to do is to make sure in the very near term they're putting in place a set of measures that can help make sure that they're supporting the financial systems of Europe and they are helping make sure that countries that are undertaking these reforms -- like Spain and Italy -- can borrow at existing low interest rates.
Both those two things are very important -- not just the long-term reforms to build a stronger Europe, but the immediate steps to make sure that they're stabilizing their financial systems and making sure these reforms can really work.
Now, they've laid out a framework with a series of very important key elements, and let me just describe those key elements for you -- and you're going to hear the European leaders speak to those specific changes.
First, they all want to work in partnership with Greece to make sure that Greece is reforming within the European community. That's very important.
Second, they are designing, as I said, the elements of what they call a financial architecture for a stronger framework to make their financial system work. And what this means is a framework of reforms so they can stand behind their banks, provide capital to the banks that need it, make sure they're protecting the savings of their depositors. That's the second key thing -- this focus on banking union or a broader financial architecture -- financial union.
You saw Spain move -- and it's a very good thing they did this -- to make sure they're committed, to make sure they can get some support of the capital -- the banks.
And the third thing is the focus on economic growth, because of course, for these reforms to work in Europe over time, Europe needs to grow faster.
As I said, you're going to hear more from the European leaders in the coming days about the specific proposals they're going to put in place. They're negotiating towards an agreement at their summit at the end of next week.
Now, a solution to this crisis in Europe has got to be made in Europe. And all of us, of course, have a huge interest, a huge stake in the success of their efforts. And we're going to continue to do everything we can to support them.
2:36 P.M. MDT