US official: Europe facing long road to recovery

21 March 2012

Europe faces a lengthy and arduous journey back to economic health as the region's debt crisis continues to rumble on.

That is the view of US treasury secretary Timothy Geithner, who believes the continent is likely to struggle financially for some time yet despite recent bailout packages for countries in crisis, such as Greece.

During his testimony to the House of Representatives' financial services committee, Mr Geithner insisted Europe should still be viewed as a threat to both the American economy and the wider global recovery as the region is only at the start of a "very tough, very long, hard road" towards rejuvenation.

"Economic growth is likely to be weak for some time. The path of fiscal consolidation should be gradual with a multiyear phase-in of reforms," he noted.

The official went on to say that widespread spending cuts by indebted governments would not be wise as they could force a "negative spiral of growth-killing austerity".

By Asim Shah

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