Geithner to attend EU meeting in bid to calm markets

US TREASURY secretary Timothy Geithner’s invitation to a special EU finance ministers meeting in Poland later this week is aimed at giving confidence to the markets, in a flurry over Greek default fears.

This will be the first time Mr Geithner has attended such a meeting in person but he has been regularly involved in discussions on critical issues by telephone with the ministers.

He was invited by the Polish government, the current EU presidency, which is hosting the informal two day meeting in Wroclaw this Friday and Saturday.

It is doubtful if he will attend the euro group meeting, limited to ministers from the 17 euro countries and their central bankers.

EU sources say he will urge the euro countries to speed up adoption of measures including making the rescue fund, the European Financial Stability Fund, more flexible and signing off on a second €€110 billion Greek bailout.

The ministers will be finalising some of the details of the package but the overarching issue, whether Greece will default of not and how to calm the markets, will remain the main issue on the table.

Mr Geithner told some EU ministers at the G7 summit in Marseilles last week that he did not consider the euro crisis was a matter of financial or economic capacity, but of the political will to deal with the crisis.

The Troika (EU, IMF and ECB) mission are due to return to Athens this week and according to EU sources, their reports will be vital to whether Greece’s economy can be stabilised or not.

Finance Minister Michael Noonan is aiming to discuss with ECB president Jean Claude Trichet and Economics Commissioner Olli Rehn the possibility of haircutting senior unsecured Anglo Irish Bank bondholders.

Both institutions have made it clear they are opposed to this, saying it would undermine the substantial credibility Ireland has built up over its handling of the crisis and could also harm the eurozone.