US treasury secretary Tim Geithner: 'The threat of cascading default, bank runs and catastrophic risk must be taken off the table.' Photograph: Jason Reed/ReutersGermany Slams 'Stupid' US Plans To Boost EU Rescue Fund -- The Telegraph
Germany and America were on a collision course on Tuesday night over the handling of Europe's debt crisis after Berlin savaged plans to boost the EU rescue fund as a "stupid idea" and told the White House to sort out its own mess before giving gratuitous advice to others.
German finance minister Wolfgang Schauble said it would be a folly to boost the EU's bail-out machinery (EFSF) beyond its €440bn lending limit by deploying leverage to up to €2 trillion, perhaps by raising funds from the European Central Bank.
"I don't understand how anyone in the European Commission can have such a stupid idea. The result would be to endanger the AAA sovereign debt ratings of other member states. It makes no sense," he said.
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My Comment: I can understand German finance minister Wolfgang Schauble's point of view .... what US Treasury Secretary Geitner is recommending is exactly what put Europe in it's present situation of high debt and the inability (and unwillingness) of some to behave responsibly on financial issues.
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