UPDATE Geithner: World Economy In Second Slowdown Of Recovery

--Geithner says further action needed on European debt crisis before it gets more severe
--Threat of "cascading default" in Europe could undermine other efforts
--European leaders must "conclusively" address problems
(Updates with new comments, including about Libya, in graphs 6-8)

By Jamila Trindle 
   Of DOW JONES NEWSWIRES 
 

WASHINGTON (Dow Jones)--The world economy is in the "second slowdown of this recovery" and more needs to be done about the European debt crisis before it becomes more severe, Treasury Secretary Timothy Geithner said Saturday.
Geithner, in a statement to the International Monetary and Financial Committee, the policy-steering committee of the International Monetary Fund, called on leaders in Europe have to conclusively address the region's problems before the crisis gets more severe in order to "create a firewall against further contagion."
"The threat of cascading default, bank runs, and catastrophic risk must be taken off the table, as otherwise it will undermine all other efforts, both within Europe and globally," Geithner said.
Geithner also said that the U.S. economy needs more support, in the form of a package of measures put forward by President Barack Obama to stimulate growth and create jobs.
"Without additional near-term support, fiscal policy in the U.S. will be overly contractionary and the U.S. economy will likely grow below its potential in 2012," Geithner said.
He said that because demand remains weak in advanced economies, emerging market countries have to increase domestic consumption to support global growth.
In a separate statement Saturday, Geithner welcomed Libya's Transitional National Council, the new governing body that took control after overthrowing Col. Moammar Gadhafi's regime.
"The success of these emerging democracies will hinge on building strong and inclusive economies that improve people's lives, especially the lives of young people," Geithner said.
Geithner's comments come as world economic leaders meet in Washington to address the European debt crisis and other global economic challenges.
-By Jamila Trindle, Dow Jones Newswires; 202-862-6684; jamila.trindle@dowjones.com

 copy by http://online.wsj.com/article/BT-CO-20110924-700887.html
about Cyber Information http://aboutcyberinformation.blogspot.com/