Geithner says ECB doing the job of politicians

WASHINGTON: US Treasury Secretary Timothy Geithner said Saturday the European Central Bank was doing the job of Europe's leaders and warned markets were outpacing their reaction to the eurozone crisis.

He praised the ECB for firm action in wrestling with the eurozone's snowballing debt and deficit problems, "substituting for the actions of government."

"All of us who look at Europe going through this have to have admiration for what they are trying to do and recognize the difficulty of it," Geithner told the BBC in an interview to be broadcast early Saturday, excerpts of which were provided by the Treasury.

However, he added, "markets are moving much more quickly than they are moving, and these things have the classic dynamic that the longer you wait, the harder it is to solve."

"They are trying to build those institutions, that is an enormously complicated task to do in normal times, much less in crisis. They have 17 governments trying to resolve their difficult politics," he said.

But he suggested Europe's politicians had been leaning too heavily on the ECB to contain the fallout from the debt crises of Greece, Ireland and Portugal.

"I'm tremendously impressed with the force and creativity of the actions they (the ECB) have taken so far, and they've been substituting for the actions of government," he said.

"One of the reasons why it is so important for the governments to escalate is so that they do not leave the central bank carrying too much of the burden of responding to a crisis."

"I think what the ECB is doing is essential, it is going to be essential for a long period of time," he said.

"But ultimately, what we need is governments stepping in and making sure they are underwriting, protecting the role, the risk that the ECB has had to take on."

Copyright AFP (Agence France-Presse), 2011