UPDATE 3-Geithner says EU action should calm markets

* In London, Geithner urges action on EU/IMF crisis plan

* UK’s Osborne pleased that EU states back bank levy

(Updates after news conference)

By Glenn Somerville and Sumeet Desai

LONDON, May 26 (BestGrowthStock) – Europe has the right ideas to
solve its fiscal crisis and now needs to put them into practice
to calm markets, U.S. Treasury Secretary Tim Geithner said on
Wednesday.

But he also once again stressed the need for a common
approach to financial regulation, seemingly a swipe at Germany
which has gone it alone on banning certain types of
speculatative trading.

Geithner was in London at the start of a 2-day European tour
to press the case for greater international cooperation and
discuss the latest in the crisis spreading through southern
Europe, which is sapping global investor confidence.

“The European leaders have put together a very strong
programme of reforms on the fiscal side and a very strong
commitment on the financial side,” he said at a news conference
alongside new British finance minister George Osborne.

“I think it’s got the right elements and again I see a very
strong political commitment — you see that not just in Germany
but across Europe — to make it work. I think what Europe should
do is implement the program they’ve laid out.”

Osborne said that it was in both countries’ interests to see
stability in the euro zone.

Policymakers in Washington and London have been dismayed by
how far the Greek crisis has spread to the rest of the euro zone
and once again put the entire world banking system under threat
due to what some say was a lack of decisive and early action.

It was the U.S. Treasury that initiated this month’s G7
emergency conference calls that led to a $1 trillion EU/IMF
rescue package but there is rising concern that this may not
have been enough and markets are still falling sharply.

The message from Geithner was that it needed time to work.
“It’s a good programme (and) has got the right elements. What
markets want to see is action,” he said.

“The basic lesson from the U.S. crisis is that you have got
to act quickly and with force.”

GERMAN CONCERN

Geithner also affirmed America’s “special relationship” with
Britain after his meeting with Osborne, the first since the
latter took office two weeks ago in London’s new
Conservative/Liberal Democrat coaltion government.

The Treasury Secretary, a former Federal Reserve policymaker
himself, is also meeting with Bank of England Governor Mervyn
King before he flies to Frankfurt for dinner with European
Central Bank President Jean-Claude Trichet.

He then goes on to Berlin to meet his German counterpart
Wolfgang Schaeuble.

Geithner said he was not here to tell Europe what to do but
Washington is clearly irked by Germany’s decision to impose a
unilateral ban of naked short selling — the practice of selling
instruments which are neither owned or borrowed — of some
securities.

He said that he and Osborne had discussed a common approach
to regulation ahead of next month’s meeting of G20 finance
ministers in Korea and leaders in Canada.

Osborne said he was happy that other European states agreed
on the need for a bank levy to fund the cost of future bailouts,
and reiterated Britain’s position that the funds raised should
be treated as general taxation rather than saved until a crisis
happens. [ID:nDE64P13E]

Stock Market Advice

UPDATE 3-Geithner says EU action should calm markets