Wall Street Journal
May 29, 2012
The Obama administration dispatched one of its top economic officials to Europe on Tuesday to press officials in Greece, Spain, France and Germany to calm a widening crisis that threatens to spark new trouble for the U.S. economy.
The latest push by the Treasury Department's under secretary for international affairs, Lael Brainard, comes as the debt troubles in Europe mount amid Greece's political standoff and renewed threats to Spain's financial system.
U.S. officials are pressing Europe on several fronts, including a broader role for the Continent's €700 billion ($878 billion) rescue fund, according to people familiar with the matter. Allowing the fund to directly recapitalize European banks—instead of forcing troubled nations to borrow from the fund for that purpose, potentially putting them under even more market pressure—could calm fears of cascading bank runs in Spain and other nations even before Greece's June 17 election.
The Treasury Department declined to comment on its specific goals. Ms. Brainard "will meet with senior government officials in each country to discuss their plans for achieving economic stability and growth in Europe," it said in a statement. Ms. Brainard met with interim Greek Finance Minister George Zannias on Tuesday. On Wednesday, she will see officials in Frankfurt—home to the European Central Bank—and Madrid, followed by stops Thursday and Friday in Paris and Berlin.