European debt crisis won't hurt U.S., Geithner says

WASHINGTON — Treasury Secretary Timothy Geithner said Thursday he doesn't think that the European debt crisis will derail the U.S. economic recovery. He also praised the steps Europe is taking to deal with the crisis.

Geithner said that because of the momentum the economy has built up over the past several months, the United States is in a strong position to weather the global turmoil caused by Europe's debt problems.

"I think it is important to note that the world economy came into this period of concerns about Europe with stronger underlying momentum and growth than many people expected," Geithner said in an interview with CNBC. "That is certainly true for the United States. I think we have a moderate but pretty solid recovery in place."

He said it was important for Europe to move quickly to put in place the support programs needed to bolster Greece and other European countries with heavy debt burdens.

"They have laid out a very strong program, and they are starting to put that in place, and it is starting to get a little more traction," Geithner said.

He said Europe's program of providing debt-payment support to Greece and a backup package for other nations, as well as working to trim high budget deficits represented a strong plan with the right elements.

He said the challenge would be "to put it in place." He praised actions that have already been taken by individual countries including Germany, Greece and Portugal.

Geithner was interviewed on a stopover in Alaska on his way to Busman, South Korea. There he will meet for two days of talks with finance ministers and central bank governors of the Group of 20 rich industrial countries and major developing nations such as China, Brazil and India.

One of the major issues the G-20 will be tackling is putting together the outlines of a coordinated program of financial reforms that can be endorsed by G-20 leaders, including President Barack Obama, when they meet in Toronto on June 26-27.

One of the issues being debated is developing a global standard for capital reserves that financial institutions must hold as cushion against potential loan losses.

Geithner declined to answer whether the United States was pushing for the G-20 to adopt a global target of 12 percent of an institution's assets being held as a capital reserve. That would represent an increase from a current U.S. target of around 8 percent.