Risks to the global economy have diminished since the Group of 20 (G20) met in Cannes, but there are still great economic challenges, U.S. Treasury Secretary Timothy Geithner warned on Sunday.
On the bright side, Europe has acted to significantly reduce the risk of a catastrophic financial crisis, Geithner told a news conference during the G20 meeting of finance ministers and central bank governors. He also said there have been encouraging signs of resilience in many emerging economies.
On the International Monetary Fund (IMF)’s role in the Europe bailout, Geithner said he believes the G20 is committed to ensuring that the IMF has the resources it needs to help its members deal with the risks from Europe. However, he admitted that the IMF cannot replace Europe in dealing with its own crisis.
“There is broad agreement that the IMF cannot substitute for the absence of a stronger European firewall and that the IMF cannot move forward without more clarity on Europe’s own plans,” Geithner said.
Meanwhile, the U.S. Treasury Secretary also spoke highly of China’s and other emerging economies’ performance during last summer and fall, which he said had helped support global economic growth.