EUROPE'S economic weakness and financial turmoil affect the US economy, US Treasury Secretary Jack Lew told EU leaders yesterday, stressing the need to boost demand and move ahead with a eurozone banking union.
"Our economy's strength remains sensitive to events beyond our shores and we have an immense stake in Europe's health and stability," Lew told reporters after talks with European Union leaders including European Commission president Jose Manuel Barroso and European Council president Herman Van Rompuy.
"In this context I was particularly interested in our European partners' plans to strengthen sources of demand at a time of rising unemployment," Lew said. EU forecasts indicate the biggest trading partner of the United States will remain in recession for the second year in a row this year.
Lew's visit also comes shortly after messy negotiations between the eurozone, the IMF and Cyprus on a bailout for the Mediterranean island, which in the end forced losses on large Cypriot bank depositors.
In his talks with Barroso and Van Rompuy, Lew underscored the importance of the eurozone moving ahead with plans for a banking union, which will involve handing over supervision to the ECB, and drafting bank resolution laws.
This would let the 17-nation bloc to handle problems like the resolution of the banks in Cyprus more efficiently.