A financial panic would detract from President Obama’s election chances; hence, Mr. Geithner has just spent the last few days arm-twisting Germans during his European trip.
Geithner said in an interview that the Eurozone needs to take steps:
“bringing down interest rates in the countries that are reforming and making sure those banking systems can provide the credit those economies need.”
This is politico code for buying PIIGs debt to lower the interest rates and keeping insolvent banks afloat with cheap loans.
Of course, the Bundesbank is posturing rejecting this pressure in order to continue playing the “bad cop” in this euro-saga.