NEWS

Joe Biden: Europe knows it has to act on debt crisis

Eurozone leaders understand the high cost of failing to act on the bloc’s debt crisis and U.S. confidence that Europe will finally overcome the crisis has not clearly improved in the last two weeks, U.S. Vice President Joe Biden said on Sunday.

“I think the clearer it becomes that there’s no alternative and time is running out, not just in Europe but in the United States and the world … is when you’re more likely to get some very difficult decisions made,» Biden told reporters travelling with him from Istanbul to Athens.

“But beyond that, I have no empirical data to suggest that we should, or should not be, more encouraged today than two weeks ago,» he said.

Eurozone leaders are meeting in Brussels on Thursday and Friday, and U.S. Treasury Secretary Timothy Geithner, in an indication of Washington’s concern that the crisis could undermine a fragile U.S. recovery if not tackled decisively, will visit European capitals between Tuesday and Thursday.

Biden’s visit to Greece is designed to encourage the country as it pushes through severe austerity measures that foreign lenders have demanded as the price for bailout loans needed to avoid a crippling debt default.

Greece enters its fifth straight year of recession in 2012 with unemployment at record highs and anger among its people over the harsh austerity measures imposed by creditors.

European leaders last week agreed to disburse a vital tranche of aid for Greece just a few weeks before the country was due to run out of money.

Some in the eurozone hope the International Monetary Fund could play a larger role in aiding the euro zone, and have held talks about making bilateral loans to the fund in order to boost its resources for that purpose.

Biden acknowledged there had been «greater talk» about an enhanced IMF role but declined further comment.

U.S. officials have consistently said that the IMF has sufficient resources to give Europe more help, but that the United States, facing tight budget constraints itself, would not be making additional loans.

Asked if his country could do more to aid Europe, Biden said «that’s what’s Geithner’s going to be doing, talking about».

[Reuters]