US Treasury Secretary, Timothy Geithner, called the bailout of Spain's banking system "a good, concrete signal" of the eurozone commitment to financial integration, but said the currency union must act quickly with more measures to quell its crisis.
"This is a very challenging crisis for them still", he said in a discussion at the Council on Foreign Relations. "They recognise they're going to have to do a bunch more to…restore a bit of calm and to convince people they're going to do what's necessary to make this work."
Mr Geithner expressed confidence that Europeans have the political will to keep the eurozone intact. "What they say to us privately is they will do whatever is necessary to hold it together", he said. But even though Europe is instituting "very tough reforms", he said it still needs time for those overhauls to work.
Mr Geithner said the Continent's leaders could boost confidence around the world by providing more clarity about their plans on three critical fronts: building a banking union across Europe, using Europe's financial firewall to restrain borrowing costs for Spain and Italy, and implementing broader measures to boost underlying economic growth. He called the latest flare-up in Europe the fourth major escalation of the crisis, which is now in its third year, but said the sense of urgency from Europe has strengthened. "This is different from the way it's felt before", he said. "They're not minimising the risks. They're not telling us that they feel they have a whole bunch of time."
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