Thread: Obama administration: Europe can pay for rescue plan

Oct 31, 2011

Obama administration: Europe can pay for rescue plan

By Richard Wolf, USA TODAY Updated 2h 36m ago

When it comes to helping Europe financially with its government and banking debt crisis, the Obama administration's attitude appears to be: We gave at the office.

"Europe has the resources and the capacity to address these risks," Lael Brainard, Treasury undersecretary for international affairs, said Monday on the eve of this week's G-20 summit in Cannes, France.

Beyond the $600 billion capacity of the European Financial Stability Facility -- and the $1.4 trillion goal set last Thursday by European leaders -- other options for financial help include:

•The European Central Bank, which did not commit new resources last week.
•Emerging nations such as China that can step up domestic consumption.
•The International Monetary Fund, bankrolled in part by the United States.
That's not to say the U.S. doesn't want to help Europe emerge from its crisis, since a deep recession there would affect banks, multinational companies and exporters here. "All of us are going to work together to support European efforts," Brainard said at a White House briefing.

The point seems to be that the U.S. dealt effectively with its own financial crisis in 2008-09 by creating the $700 billion Troubled Asset Relief Program to bail out financial institutions, passing the $825 billion economic stimulus package to jump-start growth and setting higher capital retention standards for banks.

That type of "overwhelming force" is what's needed in Europe now, Brainard said. The plan unveiled last week includes all the right elements, she said -- now the details need to be fleshed out.

Obama set the tone for the U.S. position in Cannes with a column in the Financial Times last week: "I am confident that Europe has the financial and economic capacity to meet this challenge, and the United States will continue to support our European partners as they work to resolve this crisis."

The gathering of 20 global economic powers, both established and emerging, already was a "catalyst" for the European deal announced last week, said Mike Froman, deputy national security advisor for international affairs and President Obama's "sherpa" at G-20 summits.

"They're action-forcing events to make decisions," Froman said.

http://content.usatoday.com/communities ... cue-plan/1

In part the IMF will contribute or guarantee a portion.
I would like for my portion of the 100 billion earmarked for the IMF in 2010 to be returned to me.
The best thing the U.S. could do to help Europe is get our own house in order.