US prods Europe on crisis, publicly and privately - by Ben Feller

U.S. Treasury Secretary Timothy Geithner is darting across Europe with a stark message: "The continent's leaders must act quickly and convincingly to defuse a debt crisis that is threatening the global economy". His visit this week comes on the eve of a summit of European leaders Friday that could yield a plan for resolving the crisis. Optimists hope a deal would persuade investors to lend to countries, like Italy and Spain, that are straining under crushing debt burdens.

Geithner's trip to five European cities is the most visible part of a broader drive the United States has been making, publicly and privately, to nudge Europe to resolve its crisis.

The United States has plenty at stake. A still-fragile U.S. economy remains vulnerable to any financial contagion that might erupt in Europe. If banks that are sitting on piles of European government debt cut off lending, the global economy would suffer. The flow of U.S. exports would slow. A panic could send stocks tumbling worldwide.

And with Obama facing re-election in less than a year, the outcome of Europe's crisis carries risks for the president personally.

Note EU-Digest: regardless of the consequences the European economic crises has on the US, Europe must solve this crises based on European criteria not on US or Wall Street imposed directives.

For more: US prods Europe on crisis, publicly and privately - seattlepi.com

S&P, Geithner and Company: Stop mingling in EU Affairs

It all is starting to look like a lot of unwanted heavy handed US pressure on Europe. 

Just days before EU leaders convene for a do-or-die crisis summit in Brussels, US based Standard and Poor's announced it was putting the sovereign debt of almost all eurozone countries, as well as the bloc's 440-billion-euro ($590-billion) bailout fund, on review for a possible downgrade. France, Germany, and leaders of all the 17 euro-zone nations were angered by Standard@ Poor's decision to put almost the entire bloc on credit watch, just as the single currency is desperately fighting for its survival. At the same time U.S. Treasury Secretary Timothy Geithner, on a trip in Europe, put even more negative pressure on Europe by saying that he was worried: "the eyes of the world are very much on Europe."

The German media turned on S@P for timing its announcement to coincide with this week's frantic search for a solution to Europe's debt crisis.The website of the German newspaper Handelsblatt reported resentment and indignation, with political and banking figures highly critical of the agency.

Christian Noyer, the president of Banque de France accused rating agencies of acting as "one of the motors of the crisis in 2008" and said it could be asked whether they were playing the same role now. Mr Noyer said that in the light of Monday's Franco-Germany agreement on far-reaching measures to tackle the crisis, the agency had mistimed its announcement as well as relying on methodology based more on political than economic factors.

Even outside the euro-zone, some eyebrows were raised. Alastair Campbell, who was press secretary to Tony Blair when the latter was British prime minister, said on Twitter it was time for television documentary makers to "shine a light" on ratings companies.

EU politicians have long been waging a war against the huge power of the rating US based ra6ting agencies and some denounced S@P's moves as a bid to deflect attention away from the United States' much bigger — and potentially even more dangerous — debt mountain.

Unfortunately the problem is that the U.S. media landscape is dominated by massive Wall Street traded corporations have , through a history of mergers and acquisitions concentrated their control over what people see, hear and read, not only in the US, but also around the world. In many cases, these giant companies are vertically integrated, controlling everything from initial production to final distribution. Recently they have turned their wrath against Europe, which has been actively trying to get the world to put stricter controls on free-wheeling Wall Street speculators, the banks and the financial community in general.

Said one EU parliamentarian: "We don't need US credit rating agencies here. As to Mr. Geithner,  please pack your bags, go home and deal with your own country's problems.  Don't tell Europe what to do.

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People's Daily Online: US Economy - Geithner jetsets across globe to peddle US debt -

For the complete report from the Peoples Daily Online click on this link

Geithner jetsets across globe to peddle US debt

Timothy Geithner, architect of bank, auto and economic rescue plans, has another high-stakes job these days: traveling bond salesman.The recession, financial crisis and two wars have pushed the federal deficit above $1 trillion, a record level that makes the Treasury secretary's role as chief marketer of US debt tougher than any of his recent predecessors'.In March, Chinese Premier Wen Jiabao said his country was concerned about the "safety" of the large amounts of money it had lent to the United States.The deficit-cutting proposals the administration has so far revealed would fall far short of what is needed. "If the Obama administration has a credible plan to bring the deficits down, they are keeping it a deep secret at the moment," said Michael Mussa, senior fellow at the Peterson Institute and former chief economist at the International Monetary Fund.

With nearly three months left in the budget year, the Obama administration forecasts that this year's deficit will total $1.84 trillion, more than four times the size of last year's record tally. The nonpartisan Congressional Budget Office estimates the annual deficits under the administration's spending plans will never drop below $633 billion over the next decade. And it forecasts an additional $9.1 trillion added to the debt held by the public - the amount that Geithner has to finance with bond sales.

Note EU-Digest: The above paints an extremely gloomy economic situation for the US, which also indicates how little flexibility Mr. Geithner has.