U.S., hosting Asia-Pacific talks, presses Europe

Treasury Secretary Timothy Geithner pressed Europe on Thursday to act more forcefully to quell its debt crisis, setting the stage for an Asia-Pacific summit overshadowed by euro-zone upheaval.

Speaking ahead of a weekend gathering of Pacific rim leaders, Geithner said he and other APEC finance ministers agreed to bolster their own economies to protect against fallout from Europe's troubles and also to work to rebalance growth.

The crisis in Europe remains the central challenge to global growth, Geithner told reporters after a round of ministerial talks in Honolulu. It is crucial that Europe move quickly to put in place a strong plan to restore financial stability.

His remarks reflected increasing alarm among the 21 members of the Asia-Pacific Economic Cooperation grouping -- one of the world's fastest-growing regions -- about a threatened spillover of Europe's debt turmoil and a drive to forge a unified front seeking more decisive European action.

Geithner also made clear that the APEC summit would keep the heat on China to let its currency -- which Washington say Beijing keeps artificially low for competitive advantage -- to appreciate.

He spoke after U.S. Secretary of State Hillary Clinton lodged criticism against China, Washington's main rival in the region, on everything from trade practices to human rights, as she vowed a U.S. reengagement in what she called America's Pacific century.

The summit, to be hosted by President Barack Obama in his native Hawaii, has been billed as an effort to make progress on forging a new free-trade area and an environmental technology pact, steps that could eventually foster global growth.

But finance ministers meeting on Thursday fretted openly about what they see as Europe's failure to take more decisive measures to stem the euro-zone upheaval. Italy has overtaken Greece as the epicenter of the crisis.

It is not being dealt with forcefully, Philippines Finance Minister Cesar Pursima told reporters in Honolulu, echoing the views of many of his Asia-Pacific colleagues.

Geithner said the principal focus of the APEC talks were how to strengthen growth in the face of pressures from Europe. The ministers voiced support for last week's pledge by leaders of the Group of 20 economies to bolster global recovery.

Asian economies will need to do more to stimulate domestic demand growth -- both so they are less vulnerable to slowdowns, such as the situation in Europe, and so they can continue to contribute to global growth, Geithner said.

But there was no sign the summit of countries that account for more than half of global economic output would offer any concrete measures to help the euro-zone cope with its crisis.

(Additional reporting by David Lawder, Michael Martina, Stella Dawson; Writing by Matt Spetalnick; editing by Anthony Boadle)