Blog Post

Tim Geithner and Europe’s phone number

According to a famous (yet apocryphal) joke by Henry Kissinger, there is no telephone number to call to speak to Europe. Indeed the fragmentation of European power and representation makes it difficult to determine who can speak for the EU or the euro area. US Treasury Secretary Tim Geithner however has found out with whom to speak to discuss responses to the euro crisis. This, at least, is what his official schedule indicates: from January 2010 to June 2012, the last date for which his calendar is publicly available, he had no less than 168 meetings or phone calls with Euro-area officials, plus 114 with the IMF. And the person he spoke most often with, apart from the IMF chief, was the ECB president.

By: Date: February 4, 2013 Global Economics & Governance Tags & Topics

According to Henry Kissinger’s famous (yet apocryphal) joke, there is no telephone number for Europe. US Treasury Secretary Tim Geithner, however, seems to have resolved Kissinger’s dilemma by calling not one number but dozens. This, at least, is what his official schedule indicates: from January 2010 to June 2012, the last date for which his calendar is publicly available, he had no fewer than 168 meetings or phone calls with euro-area officials, plus 114 with the International Monetary Fund. And the person he spoke to most often, apart from the IMF chief, was the European Central Bank president.[1]

I had the idea to examine this data when I was recently asked to speak at a conference on the US and the euro-area crisis. I was looking for some sort of quantitative evidence of the involvement of the Obama administration in the European discussion, and thought the frequency of these contacts would provide an informative indicator. Obviously, the calendar does not indicate what the subject matter of discussions was. But what else could have justified 58 contacts in 30 months between Tim Geithner and the ECB’s successive presidents, Jean-Claude Trichet and Mario Draghi? Admittedly, he may have had a more diverse array of topics to discuss with German Finance Minister Wolfgang Schäuble (36 contacts) or his French counterparts (32 contacts). But why would have he called them significantly more than the UK Chancellor of the Exchequer (19 contacts), with whom euro-area issues must also have been discussed? The one institution with which he certainly addressed other issues is the IMF (114 contacts with successive Fund chiefs Strauss-Kahn and Lagarde, and deputies Lipsky and Lipton), but here again, knowing how concentrated on Europe the IMF has been in recent years, the euro crisis certainly featured high on the agenda.    

Figure 1 displays the distribution of contacts for the entire period. Three striking facts emerge:

  • First, the data confirm the key role played by the IMF and the frequency of contact it has with the US Treasury Secretary. Nevertheless, there were significantly more contacts with European policymakers (168 against 114), which can be regarded as indicative of the direct involvement of the US administration in European policy discussions;
  • Second, the ECB emerges on top of all European institutions, far ahead of the European Commission and even further ahead of the Eurogroup, for which only two contacts are recorded (a G3 conference call in March 2011 and Geithner’s participation in a Eurogroup meeting in Poland in September 2011). There is little doubt that for the US Treasury, “Mr Euro” is first and foremost the ECB president. This finding is especially striking, as the ECB’s institutional interlocutor is the Fed, not the US Treasury.;
  • Third, there have been many more bilateral contacts with the German and French finance ministers than with the European Commission or the chair of the Eurogroup. This confirms the driving role of major national capitals.

Figure 2 displays the number of monthly contacts distributed into three broad groups: European institutions, national governments, and the IMF. It indicates four episodes of intensive transatlantic consultations:

  • Before the agreement on the first Greek programme in May 2010. In March, Geithner had no fewer than 9 calls or meetings with Fund chief Strauss-Kahn;
  • In autumn 2010, in the run-up to the Irish programme. In November 2010, at a time of controversy between the IMF and the ECB over a possible bail-in of Irish bank creditors, Geithner had 5 contacts with the Fund and 5 with Jean-Claude Trichet;
  • From spring 2011 to end 2011 (with a short respite in late summer/early autumn). This was a period of intense discussions on the restructuring of the Greek debt and the search for a comprehensive response to an escalating crisis. The US administration was especially vocal on the so-called “firewall”. Contacts during this period were more frequent than ever before and involved all categories of European partner;
  • In spring 2012. During this period, in which discussions increasingly focused on the plans for a banking union, contacts with the Fund were relatively less frequent, in comparison to those with European institutions and national capitals. During this period Geithner had several contacts with his Spanish counterpart De Guindos, and with Italian PM and Finance Minister Mario Monti. 

Summing up, the data suggests constant and very active involvement on the part of the Obama administration in the search for solutions to the euro crisis. They also tell us who matters in Europe in the eyes of the US administration: clearly, the one European institution that really counts is the ECB. In spite of the complex governance arrangements in place, other European institutions matter much less than Berlin and Paris.  

Thanks to Julian Lentz for his assistance in the compilation of data.


[1] Excluding contacts with Mario Draghi prior to his appointment to the ECB. Draghi was chairing the Financial Stability Board, so presumably contacts up until November 2011 were devoted to G20 affairs.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

View comments
Read article More on this topic More by this author

Blog Post

Silvia Merler

The American opioid epidemics

What’s at stake: The US Department of Health and Human Services (HHS) declares that the country is “in the midst of an unprecedented opioid epidemic”. Since 1999, the rate of overdose deaths involving opioids - including prescription pain relievers and heroin - nearly quadrupled. We review contributions looking at the economic drivers and implications of this phenomenon.

By: Silvia Merler Topic: Global Economics & Governance Date: March 27, 2017
Read about event More on this topic

Upcoming Event

Apr
10-11
16:00

Towards EU-MENA shared prosperity

The second edition of the "Platform for Advanced & Emerging Economies Policy Dialogue" will discuss global supply chains, energy and security.

Speakers: Karim El Aynaoui, Larbi Jaidi, Simone Tagliapietra, Guntram B. Wolff, Giacomo Luciani, Maria Demertzis, Marion Jansen and Rania Al-Mashat Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author

Blog Post

Pia Hüttl

Alice in gender-gap land

What’s at stake: The International Women’s Day on 8 March drew attention to the gender gap again, both in pay and in employment. Ongoing research on the topic shows that the gender gap persists worldwide, from finance to arts. For it to change, bold action is needed, ranging from targeted policies to rethinking gender norms.

By: Pia Hüttl Topic: Global Economics & Governance Date: March 20, 2017
Read about event More on this topic

Upcoming Event

Apr
12
11:00

Global outlook and policy priorities

At this event the Managing Director of the International Monetary Fund, Christine Lagarde, will speak about the global outlook and policy priorities, ahead of the 2017 IMF Spring Meetings

Speakers: Christine Lagarde, Jean-Claude Trichet and Guntram B. Wolff Topic: Global Economics & Governance Location: Brussels
Read article More on this topic More by this author

Opinion

Guntram B. Wolff

Europe should lead the way with multilateralism

Despite the unique partnership with the USA, Europe needs to reflect on its place in an unstable world. Especially if the US Administration moves towards protectionism, the EU will need to build and deepen relationships with other partners.

By: Guntram B. Wolff Topic: Global Economics & Governance Date: March 16, 2017
Read article Download PDF More on this topic More by this author

External Publication

ruble

Collapse of the Ruble zone and its lessons

This essay, published by CESifo, aims to summarise the experiences of the two monetary disintegration episodes, i.e. termination of settlements in TR since 1 January 1991 and the gradual collapse of the Soviet ruble area in 1990–1993.

By: Marek Dabrowski Topic: Global Economics & Governance Date: March 15, 2017
Read article More on this topic More by this author

Blog Post

photo2016

NAFTA in play: How President Trump could reshape trade in North America

How will the story of NAFTA unfold under the Trump presidency? Uri Dadush examines three possible scenarios and provides an overview of the policy implications for the various trading partners of the United States.

By: Uri Dadush Topic: Global Economics & Governance Date: March 1, 2017
Read article More on this topic More by this author

Blog Post

dsc_0809

The Mexican automotive industry and Trump’s USA

Trade with Mexico is a controversial topic for the new US administration. And the automotive sector is emblematic of Trump’s promise to bring manufacturing jobs back to the USA. But a look at the numbers reveals risks in any shake-up of cross-border trade. 22% of US automotive exports to Mexico are later reimported as part of cars “made in Mexico”. And disrupting production chains could have repercussions around the world.

By: Filippo Biondi Topic: Global Economics & Governance Date: February 27, 2017
Read article More by this author

Blog Post

IMG_1985

The Trump market rally conundrum

What’s at stake: Since Donald Trump’s election in November, the US stock market has been on an unabated rally. The Dow Jones Industrial Average powered through the 20,000 mark for the first time in history. POTUS has been quick in using this financial bonanza as prima facie evidence of his early accomplishments. However, several commentators question the link between Trump’s unorthodox economic policy pledges, the stock market rally, and future growth prospects.

By: Alessio Terzi Topic: Finance & Financial Regulation, Global Economics & Governance Date: February 27, 2017
Read article Download PDF

Policy Brief

Screen Shot 2017-02-17 at 16.42.38

Europe in a new world order

In this paper the authors explore what the EU’s strategic reaction should be to US diminishing giant policies, and the EU’s role in a world of declining hegemony and shifting balances

By: Maria Demertzis, André Sapir and Guntram B. Wolff Topic: European Macroeconomics & Governance, Global Economics & Governance Date: February 17, 2017
Read article More on this topic More by this author

Blog Post

Pia Hüttl

Inflation's comeback

What at stake: After years of deflationary pressures and anaemic economic performance, inflation seems to be on the rise again, both in the US and the euro area. Does this comeback mark a return to target? Will it be sustained, and what should central banks be thinking? These are among the questions raised in the blogosphere.

By: Pia Hüttl Topic: Global Economics & Governance Date: February 13, 2017
Read article More on this topic More by this author

Blog Post

Marek Dabrowski

The EU should not retaliate against Trump’s protectionism

If the US moves ahead with Republican plans to introduce a border adjustment tax, the EU will need to decide on its response. Marek Dabrowski argues that the EU would be unwise to retaliate with its own anti-import policies: the border adjustment tax would be difficult to implement and damaging to the global trade order. Instead the EU should build a broad coalition of allies to defend free trade.

By: Marek Dabrowski Topic: Global Economics & Governance Date: February 9, 2017
Load more posts