Geithner in Europe

European Union plans for a rescue fund for cash-strapped eurozone countries have the "right elements," but require swift and decisive action, according to United States Treasury Secretary Timothy Geithner.

"The European leaders have put together a very strong program of reforms on the fiscal side," Geithner told reporters in London on Wednesday after meeting with his British counterpart George Osborne. "What markets want to see is action."

The fund would provide loans under strict conditions to eurozone governments who are unable to borrow on capital markets.

New bank tax

Both Geithner and Osborne also praised outlines by the European Commission for a new tax on banks that would help pay for future economic crises. Geithner added that there was "broad support" across G-20 nations for the idea of a bank tax, but that implementation did not have to be "perfectly uniform" internationally to be effective.

The EU's commissioner for internal markets and services, Michel Barnier, told Reuters news agency that the bloc was prepared to move forward on the bank levy, saying: "It is not up to the United States to pay for the financial stability of Europe."

The plans by Brussels suggested reserving the revenues from the tax for national bank bailout funds, apparently in conflict with French and British calls to give the money to underfunded national budgets.

Off to Berlin

Later on Wednesday Geithner left London for Frankfurt, where he had dinner with European Central Bank President Jean-Claude Trichet. He travels to Berlin on Thursday to meet with German Finance Minister Wolfgang Schaeuble.

A likely point of discussion is Germany's recent unilateral ban on "naked short-selling," a speculative financial trade blamed for exacerbating the financial crisis in Greece.

The ban, announced suddenly and introduced at midnight on Tuesday of last week, was followed by drops in European and global markets, as well as angry reactions by some EU member states.

acb/dpa/AFP/Reuters
Editor: Rob Turner