U.S. Treasury Secretary Jack Lew is urging Europe to boost growth and shore up financial backstops he says are key for the region and the world. Lew made his call in Paris, during the first leg of a trip that also takes him to Berlin and Lisbon.
Speaking at a joint press conference with French Finance Minister Pierre Moscovici, Treasury Secretary Jack Lew praised the strides made by European countries in emerging from the crippling economic and financial crisis that gripped the eurozone for several years. But Lew urged the Europeans to do more in building up so-called "backstops."
"I think that as these mechanisms are tested, they have the capacity to grow and it will continue to be our view that the more capital there is in European banks, and the stronger the backstops are, the better it is for the European economy, the U.S. economy and the global economy," he said.
The European Union agreed last month to a plan to close failing banks, with bailout funds coming from banks, not taxpayers. But critics said it fell short of what was necessary to avoid a major crisis in the future.
Secretary Lew also urged European economies to boost consumer demand to stimulate economic growth.
"It's clear that some countries have more capacity to stimulate growth in demand than others do. It's been our view that you look at the global economy, there needs to be some more growth in Europe, there needs to be some more growth in Asia, and we are doing our best to promote growth in the United States," he said.
The Treasury secretary did not specifically mention economic powerhouse Germany - the next stop on Lew's trip. But Germany has been criticized previously for not doing enough to bolster domestic demand or to support the European economy as a whole.