Unlike his predecessor, Timothy F. Geithner, who was an expert on international financial crises, Lew’s background is in domestic policy. He has been a key player in the nation’s budget dramas for three decades.
But Lew, 57, is establishing himself as the nation’s economic spokesman around the world. While Obama was back in Washington preparing to release his 2014 budget — due Wednesday — Lew hopscotched from Brussels to Frankfurt to Berlin for the first of two days of economic discussions. Last month, he made a similar visit to China — and on the plane ride there, he had to make calls dealing with Europe’s latest financial flash point, Cyprus.
Lew is encountering difficult challenges here. An implosion of Cyprus’s banking system showed how close Europe remains to the edge of financial cataclysm years after the continent’s crisis began — and how ill-equipped many officials remain in dealing with financial panics. (Lew personally briefed Obama on the problems in Cyprus in recent weeks, requiring a level of intimate knowledge that he did not need in his old job).
What’s more, a third of the euro zone is in recession and unemployment is near record highs. Meanwhile, economic powerhouse Germany is reluctant to take the types of dramatic steps to bolster the continent’s economy that the United States has long advocated — and it has been focused far more on austerity to get budgets in order.
“Lew’s powers of persuasion and exhortation will be put to the test as the U.S. has little direct leverage over European leaders in persuading them to take more decisive and proactive measures to stem the crisis and revive growth,” said Eswar Prasad, a professor at Cornell University.
Lew is not well known in Europe, though he had opportunities to get to know many leading officials in the past four years as Obama’s chief of staff and also as Hillary Rodham Clinton’s deputy at the State Department.
In Brussels on Monday morning, Lew continued with the practice of applying subdued but steady pressure on the Europeans, meeting with a series of officials that included European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy. Afterward, Lew said the continent’s fortunes will weigh heavily on the United States and that he expects the Europeans to continue to take steps to generate growth.
“Our economic strength remains sensitive to events beyond our shores, and we have an immense stake in Europe’s health and stability,” Lew said. “I was particularly interested in our European partners’ plans to strengthen sources of demand.”