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Eurozone threatened with downgrade if summit fails

Nicolas Sarkozy and Angela Merkel attend press conference on December 5, 2011 in Paris, France. A summit among European leaders is planned for Friday.

Steve Chiotakis: Tim Geithner arrived in Germany today for a three day European visit, and he's playing a couple of roles there. He's reminding the leaders that the U.S. is an economic partner -- a very, very important economic partner. And then he's this cheerleader too, telling European leaders, "Yeah, you can do it, you can make it through this terrible financial crisis!" Asking them to take bold action to save the continent's economy ,and to the save the euro as well. Now, Geithner's visit comes the same day Standard & Poor's said it could cut the credit ratings of all the eurozone countries.

The BBC's Steve Evans is with us now from Berlin with the latest on that story. Hey Steve.

Steve Evans: Hi.

Chiotakis: So the Treasury Secretary arrives in Germany today. What’s his role in all of this?

Evans: I think his role in all this is to tell Europeans that if the euro crashes, well, then, everybody suffers. I think his role is to say: it’s a serious matter, you really do need to sort this thing out.

Chiotakis: Talk about this S&P warning, that they could downgrade all of the eurozone nations if those nations can’t get the debt situation under control. How’s that been received in Germany today?

Evans: Well, not very well really. German politicians and French politicians are saying, "Look, we’re putting the measures in place, we're doing what we can do. And Italy, for example, has improved its finances markedly, so we think that your warning is misplaced." Its effect on the financial markets is probably not very great, but people are saying, "What’s the timing all about? Why do this in this particular week?"

Chiotakis: And what are we going to hear later this week when this big European Union summit happens in Brussels?

Evans: We don’t know, this is summit number... I-don’t-know, I’ve lost count. This is the one that’s supposed to sort out the problems. And they all know that if this one doesn’t then it does get serious. What remains to be seen is if there is a serious plan in place. We know what Chancellor Merkel and Mr. Sarzkozy want -- much more control of the finances of eurozone countries. But the question is whether the European Central Bank will become freer with its money, and so satisfy the markets that something real is happening.

Chiotakis: The BBC’s Steve Evans in Berlin. Steve, thank you so much.

Evans: You’re welcome.

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