Europe must act quickly to solve debt crisis

Frankfurt, Germany 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 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, such as 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 U.S. has been making to nudge Europe to resolve its crisis, says Indianapolis Star.

In a meeting with Italian Prime Minister Mario Monti Geithner said the leaders of Europe are working to strengthen the financial firewall that is essential for economic reforms to have a chance to work.
"The world can be encouraged by the progress of the last few weeks," Geithner said in a press briefing. Geithner is on the last stop of a whistle-stop tour of Europe to lobby for action on Europe's sovereign debt crisis. His meeting with Italy's Monti comes ahead of an EU summit on Friday to seek a breakthrough in the euro zone's worsening debt crisis. Geithner said Monti's government had put together a strong package of reforms in its latest austerity package. Monti said Italy's relationship with the U.S. would become stronger. He said Rome would hold consultations with Washington and he would visit the White, informs Economic Times.

In their letter to EU President Herman Van Rompuy, Merkel and Sarkozy stressed a decision was needed at this week's meeting to have the new treaty in place by March."We are convinced that we need to act without delay," they wrote.Van Rompuy offered an alternative way to secure future fiscal discipline. He favors simply amending existing rules that apply to the 17 countries that use the euro. That would allow leaders to avoid the trickier step of requiring every country to approve the new treaty through parliamentary votes.
But Merkel and Sarkozy believe that to restore lost trust in the euro currency and calm markets, Europe needs to take the more formal step, even if it's politically more difficult.A senior French official, who spoke on condition of anonymity because talks were on going, said Paris remained optimistic that a tentative deal among the eurozone's members -- and others who want to join voluntarily -- could still be struck by Friday night. This official said it is looking less likely that an agreement would come from all EU leaders.House in January, reports Detroit Free Press.