Geithner continues his summer tour, speaking today in Paris. He repeats that the US supports a strong dollar and that the dollar will remain the principle reserve currency. He adds that the US will have to bring down its fiscal deficit after an economic recovery to preserve the dollar’s global role. The dollar’s role also means the US must sustain confidence in the financial system.
On the European economy, Geithner praises European efforts to sustain recovery, calling them quite substantial so far. Severe challenges lie ahead for parts of Eastern Europe though, he cautions.
A pretty strong defense of the dollar’s role as the global reserve currency if (a big if) Geithner stays true to his vow to curb the deficit. All the evidence coming out of the Congress suggests the opposite.
