U.S. proposes wider bailout

WASHINGTON — Treasury Secretary Timothy Geithner Wednesday unveiled a sweeping plan that calls on the United States and other nations to offer billions more to bail out economies in crisis and prods a reluctant Europe to prop up the reeling world economy with more aggressive government spending.

Geithner said the administration will ask Congress to make $100 billion more available — nearly doubling the current U.S. commitment — to the International Monetary Fund to aid struggling nations.

The debate over how to rescue the global economy is setting up a clash of ideas just as finance chiefs are converging in London this weekend to hash out a unified approach to the crisis.

Geithner said he plans to press his counterparts from major economies to boost their fiscal stimulus and to sustain that spending for as long as the downturn lasts. "Forceful" actions by the world's leading economies are needed because "the global recession is deepening," Geithner said.

Fresh data out of China, which had been a rare source of good news, showed exports there plunging a worse-than-expected 25.7 percent in February, indicating that the drop-off in world demand is accelerating. The World Bank this week warned the world was heading into its first global recession since World War II.

Many European leaders counter that they already have stimulated their economies enough. What the world needs now, they argue, are tougher — and globally enforced — regulations of financial markets. This week, they pushed back against Obama's plan.

"The Americans should be more modest about giving lessons because the crisis comes from them," said Patrick Devedjian, France's Minister for Recovery, in a TV interview.

Despite U.S. urging, European Union countries have kept their recovery spending relatively modest, an average of 3.3 percent of gross national product that is about half the American proportion.

Less opposition exists elsewhere around the world. China says it wants to spend 2 percent of GDP for its economic stimulus, while Saudi Arabia is moving toward a 3.3 percent package.