Treasury Boss Taking Fire in Europe Over Stimulus

After the withering reception his bank rescue plan received in Washington, Treasury Secretary Timothy F. Geithner could be excused for seeing his first trip abroad as a well-timed respite.

Mr. Geithner, whose last job was head of the Federal Reserve Bank of New York, has spent his career studying and carrying out international financial policy. So two days spent in Rome brainstorming with finance ministers from the Group of 7 nations about fixing the global economy played to his specialty.

But amid signs that Europe’s worsening slump has created fissures among G-7 leaders about how to deal with the crisis, Mr. Geithner found himself on the defensive in Rome this weekend, though not to the extent he was in Washington.

In a statement, the G-7 ministers promised to cooperate on the global economic crisis and said they had taken steps to inject cash into banks and identify troubled assets. They said the effects of such measures would build over time.

“There are no quick fixes,” said Alistair Darling, Britain’s finance minister. He said participants were happy that the United States was committing a lot of federal money to cushion the economy, but more was expected. “We all understand that the U.S. needs to be an influence for good,” he added.

The G-7 countries are Britain, Canada, France, Germany, Italy, Japan and the United States. Russian representatives also attended the meeting.

Last week Giulio Tremonti, Italy’s finance minister and Mr. Geithner’s host for the weekend, gave a tart review of the Obama administration’s stimulus in a local newspaper here.

“If the problem is an excess of debt, the cure is not adding more debt, whether that debt is public or private,” he wrote in the Corriere della Sera. Italy is one of the most indebted countries in Europe. Its debt surpasses its annual gross domestic product.

The national debt of the United States, by contrast, was about 40 percent of G.D.P. at the end of 2008, but Moody’s expects that to rise to 60 percent by 2010 as a result of the recession and spending tied to the federal bailout and stimulus programs.

On Saturday, Mr. Tremonti also spoke disdainfully of the “Buy America” provision in the stimulus plan, which covers iron, steel and manufactured goods, as a political slogan. He and other ministers emphasized the importance of keeping the American economy free of protectionism.

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The president of the World Bank, Robert B. Zoellick, said he told ministers this weekend how crucial it was to keep the world economy open and to avoid the protectionist policy errors of the 1930s. “The Buy American provision is very dangerous,” he said.

As for Mr. Geithner’s ability to provide global leadership, Mr. Zoellick was hopeful but guarded. “He has to follow through,” he said, on to the bank rescue plan. “The demanding part will be in the delivery.”

At a news conference Saturday, Mr. Geithner said the Obama administration was committed to free trade and efforts to jumpstart the world economy.

He also addressed a barrage of questions about when more details about the administration’s bank rescue plan would be disclosed. “We are going to move quickly to lay out a broad design,” he said. “But we also want to make sure that they work.”

Mr. Geithner’s trip to Rome has been a whirlwind, leaving little time for sight seeing.

He arrived in Rome on Friday morning and began with a lunch at the finance ministry with his host, Mr. Tremonti. In the afternoon, there were one-on-one meetings with his counterparts from Britain, Japan, Russia and Canada, followed by a working dinner at a villa in Rome.

Mr. Geithner was the only minister to get the podium to himself in the main conference hall at the Excelsior Hotel. He seemed to find a comfort level that was lacking when he announced his bank plan last week at a news conference but took no questions.

This time, he took a series of queries. When that was over, he waited several beats before exiting with a smile and a wave.

This story originally appeared in the The New York Times