US Treasury Secretary Meets With EU Finance Ministers

Posted September 16th, 2011 at 4:55 am (UTC-5)
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U.S. Treasury Secretary Timothy Geithner is in Poland for talks with European finance ministers meeting on the eurozone debt crisis.

Analysts say Geithner’s rare presence at the European talks is a sign of increasing U.S. concern about the global impact of the eurozone debt crisis.

The world’s leading central banks agreed Thursday to provide additional dollar loans to European commercial banks that have found it harder to borrow because of their exposure to indebted European governments.

The European Central Bank said it will make three-month dollar loans to eurozone banks in coordination with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank. It says the new loans will provide the banks with as many dollars as needed until the end of this year.

The announcement gave a boost to European bank shares and major European stock indexes.

German and French backing for the struggling Greek economy also lifted the markets, reassuring investors that Athens will not be defaulting on its debts anytime soon.

The debt crisis in Greece and other EU nations has dampened economic growth across the eurozone. A European Commission report issued Thursday predicted that the overall economy of the 17 nations will slow to a virtual standstill in the second half of this year. But, the Commission maintained its forecast of 1.6 percent growth in the eurozone economy in 2011, thanks to a stronger than expected recovery in the first half, particularly in Germany.