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Geithner Says Europe Has Lowered Risks of 'Catastrophe'
Reuters | February 26, 2012 | 07:31 PM EST

U.S. Treasury Secretary Timothy Geithner said on Sunday that Europe's actions so far to deal with its debt crisis have averted potential financial catastrophe but said it still must put up a sturdier firewall against contagion.

"A durable solution requires both a sustained period of economic reform and a substantial financial firewall to support those reforms," he told a press conference at the conclusion of a Group of 20 finance ministers' and central bankers' meeting.

The weekend meeting focused on Europe and many G20 participants made clear they want to see Europe put up more money for its own defense against a worse crisis before they chip in with more help through institutions like the International Monetary Fund .

"There is broad agreement that the IMF cannot substitute for the absence of a stronger European firewall and the IMF cannot move forward without more clarity on Europe's own plans," Geithner said.

The U.S. Treasury chief repeated that he was not prepared to go to Congress now to seek more resources for the IMF because he didn't feel they were needed at this time.

He declined to say how big a financial firewall he felt Europe needed to put up now but noted that, in order to be credible in markets, it had to be bigger relative to possible claims that might be made on it.

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