Given that the U.S. has yet itself to put its financial house in order European Finance Ministers were united ony in being a bit miffed at a lecture from US Treasury Secretary Tim Geithner over the "catastrophic risk" of not taking decisive action to tackle the sovereign debt crisis by chosing to delay until October a decision on the Greek bail-out.
Geithner also urged European finance ministers to increase the size of the Eureopean Financial Stabiliy Facility. Geithner's trip to Poland was unprecedented and was meant to show U.S. concern about the debt crisis in Europe.
Mr Geithner said: "Politicians and central banks need to take out the catastrophic risk to markets...they have to definitively remove the threat of...cascading defaults [and avoid] loose talk about dismantling the institutions of the euro."Later he said to reporters: "What is very damaging from the outside is to see not just the divisiveness [in Europe] in the broader debate about strategy, but the ongoing conflict between the governments and the central bank. You need both to work together to do what is essential for the resolution of any crisis."
In Poland, Mr Geithner's tone grated with some of the European delegates. Didier Reynders, the Belgian finance minister, told Reuters: "I'd like to hear how the US will reduce its deficits ... and its debts."Jean-Claude Juncker, the chairman of the Eurogroup, added: "We are not discussing the expansion or increase of the EFSF with a non-member of the euro area."
Wolfgang Schaeuble, the German finance minister, argued that expanding the EFSF would put too much of a burden on taxpayers. Austria's delegate, Maria Fekter, said that Mr Schaeuble had called for the US to participate in the bail-out fund too, which Mr Geithner "ruled out emphatically". I guess Geithner does not want to put his money where he mouth is or rather U.S. taxpayer money!
Brushing off U.S warnings the Europeans said they would wait until October to decide whether to release an €8bn tranche of bail-out money to Greece. The move will mean the next set of talks are once again held against a deadline of Greece running out of money. Athens has said its reserves to pay wages and pensions will run out in October.
Leaders also need to break a deadlock over Finland's demands for collateral in return for the bail-out. They also want to see Athens implement tough austerity measures, including a two-year property tax announced last week.
Evangelos Venizelos, the Greek finance minister, vowed to meet the austerity demands:"All Greeks must understand that if tough decisions are not taken and applied now, what will happen is truly dramatic," It looks as if the European debt crisis far from solved although U.S. stock markets have been up the last fews days suggesting investors for the moment thinks that the situation has eased. I include a news video on the conference.