US` Geithner Urges Strong Medicine On G7 Debut

Geithner, making his G7 debut in the role, also responded in sort to concerns that recession is breeding protectionism.

Timothy Geithner made his Group of Seven debut as U.S. Treasury Secretary on Saturday with a simple, straightforward message -- the United States is taking strong medicine to fix its economy and others should do the same.

On the day after Congress approved a $787 billion economic stimulus package, he had lots to talk about, urging governments and central banks to maintain bold measures until recovery takes hold.

His main mission was to explain to G7 colleagues that the United States was moving swiftly with its unprecedented spending package and a soon-to-be-detailed bank stabilization plan. He said G7 countries all realized the gravity of the situation.

"Given the severity of the current economic and financial crisis, these actions must be forceful and sustained for a period that matches the likely duration of the crisis," Geithner said in his closing remarks.

"There is little debate about the scale of the challenges people face, and we see it in Germany just in the last couple days," he told a a news conference, referring to GDP data released on Friday.

President Barack Obama's plan to rescue the U.S. banking sector fell flat when the initial outline was announced last week, driving stock markets lower and raising concerns about whether the new administration was up to the challenge.

The Treasury Secretary gave little of the further details economists say are needed to convince investors on the plan.

But off the record, a senior treasury official said it had been aware that the plan had been vulnerable to a negative market reaction but decided to proceed in aid of getting the plan off the ground and into consultation at home and abroad.

"That left us necessarily in a position where people would be hungry for details," the official told reporters, speaking on condition of anonymity.

"We wanted to help get Congress invested in the basic objectives and strategy and also, frankly to be fair, we wanted to come here."

NO FIRST TIMER

Geithner is a familiar face to many of the G7 ministers, having worked at the New York Federal Reserve, International Monetary Fund and in international affairs at the Treasury.

At many G7 meetings as a policy "sherpa", Rome was his first meeting as secretary, less than three weeks after being sworn into office.

He said he had sketched out the bank plan for his colleagues and assured them that the details would be filled in quickly. He appeared to win the confidence of some leaders.

"We welcomed him very warmly," said French Economy Minister Christine Lagarde. "On paper (the plan) is great, the principles are very good, now it needs to start going."

Geithner said he explained that the "buy American" clause, which requires government-funded public works projects to use U.S.-made steel and other products where possible, would not violate any commitments made to the World Trade Organization and affirmed President Barack Obama's commitment to open trade.

This won some traction with Italian Finance Minister Giulio Tremonti, who said that while protectionism was a danger, he believed America's abandonment of WTO policies was not. "At the G7 we talked about 'Buy America' as just a slogan," he said.