Europe Warned Against Debt Complacency at Davos

    FRANKFURT AM MAIN, GERMANY - SEPTEMBER 27:  The symbol of the European common currency, the Euro, stands in front of the headquarters of the European Central Bank (ECB) on September 27, 2011 in Frankfurt am Main, Germany. Europe is continuing to wrestle with the ominous prospect of a Greek debt default that many fear could spread panic and push the already fragile economies of Italy, Portugal and Spain into a crisis that would rock the Eurozone and lead to global repercussions. On Thursday the Bundestag, under the urging of German Chancellor Angela Merkel, is expected to pass an increase in funding for the European Financial Stability Facility (EFSF), a measure many see as necessary for financial markets to regain confidence in the European banking system.  (Photo by Ralph Orlowski/Getty Images)

    Ralph Orlowski / Getty Images

    European leaders were warned at the World Economic Forum in Davos on Friday not to forget about the debt crisis—and have their defenses ready if it gets worse. International Monetary Fund president Christine Lagarde pressured Greece and its creditors to hammer out a deal on cutting the debt burden, and she said she was pleased to see Greece and its bond holders going “back to the drawing board” to come up with a plan to loosen the debt burden. U.S. Treasury Secretary Timothy Geithner told delegates that the “only way Europe is going to be successful in holding this together, making monetary union work, is to build a stronger firewall.” Geithner said that while the IMF can help, its resources can’t be used as a “substitute for a more effective” domestic response.

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