Geithner wants eurozone fund to bulk up with debt
US Treasury Secretary Tim Geithner arrived in Poland today to urge European finance chiefs to boost their financial firepower with bolder action to tackle the region's sovereign debt crisis.
Geithner, sitting in on the meeting of ministers in Wroclaw, is understood to have called for the eurozone to expand its current €440 billion (£385 billion) bailout pot using debt.
Concerns over the inadequate size of the fund have increased after bailouts were arranged for Greece, Ireland and Portugal during the past year.
The fund is far too small to cope with any call for help from a larger nation such as Spain or Italy, but using leverage to increase its size could also help avoid political opposition among individual member states over being asked to pump in more funds.
US nerves are mounting over a looming Greek default, and the slow pace at which nations are moving to ratify July's agreement on new powers to extend the reach of the bailout fund and a second Greek rescue.
US banks and investors are reluctant to lend dollars to European banks, triggering emergency action from five central banks including the Bank of England to pump dollars into the financial system.
Citigroup's Jurgen Michels said he "did not expect much" from today's meeting, but added: "There is a chance that with the increasing pressure on the banking side, the eurogroup will announce some measures to provide support, in the form of capital or guarantees for the banking sector."
