Euro’s survival in US interest: Geithner

“I think it’s in the interest of the United States and the Europeans to do whatever they can to make sure they calm these pressures now spreading across Europe. It’s very important to us and to the world economy as a whole.”

Geithner was speaking from Marseille,France,where Group of Seven finance ministers and central bankers were meeting amid heightened worries that Greece’s problems could fracture the European currency union.

“It’s been very,very damaging to the US economy this summer,” Geithner said of the EU crisis.

“I think it’s very important to the world that the Europeans do what they need to do so that the pressures they’re facing,the problems they’re facing,don’t spread,don’t add to the pressures on the world economy as a whole.”

Honing in on the dispute over whether Greece has reformed enough to merit more bailout funds from Europe’s stronger economies,Geithner stressed that the two cannot be separate.

Credible reforms are absolutely necessary,he said,but “Those need to be backed by very,very powerful,unequivocal financial force,so the governments have the time to make those reforms work.”

“You can’t do the money without the reforms,you can’t do the reforms without the money,” he said.

“They’ve got some work to do in that area,” he added on Europe’s leadership. “They are moving,but I think they’re going to have to demonstrate to the world that they have enough political will.”

Geithner said Europe has the financial capacity to deal with the crisis.

“Even if you take a very conservative estimate it’s completely within the capacity of the stronger members of the euro area to absorb those costs.

“These costs would be much,much greater for them,for their economy,if they were to sit there and do nothing.”