Europe 'Has the Capacity' to Manage Debt Crisis: Geithner

Timothy Geithner
Photo by: Pete Souza
Timothy Geithner

Europe can survive the current economic crisis if its leaders make good on commitments to turn their economies around, Treasury Secretary Geithner told CNBC Wednesday.

"Europe has the capacity to manage this," said Geither. "They made a decision to do it, and I believe they have the capacity to do that."

Geithner he also expects China to revalue its currency, but not right away. He said any adjustment of the currency is a world concern, not simply one of the US.

"I think China believes it's in their interest to move, and I'm confident that they, at the right time, will begin to let their exchange rate gradually appreciate again," he said.

Geithner spoke with CNBC while he was at the Boeing plant in Tacoma, along with the Port of Tacoma, during a stop in Washington State, while en route to China for joint talks known as the Strategic Economic Dialogue (SED).

Responding to Germany's action on short-selling, Geithner said he couldn't predict what would happen.

"The most important thing for Europe to do now, Germany and all the countries in Europe, is to go ahead and put in place the program they announced," he said.

Geithner added that neither the U.S., nor individual states, such as the troubled California, would face some of the same challenges as Greece or Spain.

"It's not going to happen in the United States," he said. "The United States has a much stronger recovery than most people would have expected just three months ago. The world economy is getting stronger, too. We've seen very strong growth in Asia, in many emerging markets."

Geither said that China seems much stronger now.

"Their leaders have shown remarkable capacity over the last 30 years to manage through this remarkable transition," he added. "And you're seeing the US is benefiting a lot from that. US exports to China grew in the first quarter of this year by 50 percent compared to the first quarter of last year."

Geither and Secretary of State Hillary Clinton will represent the US at the talks, scheduled for May 23-25.

—Robert Hand contributed to this story.