By JASON DOUGLAS for Dow Jones for WSJ
LONDON—U.S. Treasury Secretary Timothy Geithner said he doesn't believe a controversial austerity program embarked on by the U.K.'s coalition government will hurt Britain's economic growth.
Critics of Mr. Geithner's U.K. counterpart, Chancellor of the Exchequer George Osborne, have warned that the Conservative-led government's program of tax rises and spending cuts will cripple a fragile economic recovery.
In a radio interview recorded at the weekend and broadcast on British Broadcasting Corp. on Tuesday, Mr. Geithner said he didn't see much risk that Mr. Osborne's strategy would compromise growth.
"I am very impressed, as one man's view looking from a distance, at the basic strategy he has adopted," Mr. Geithner said. "At a time when it was easier to make tough choices quickly, he locked this coalition into a set of reforms that were very good."
While the U.K. and most of Europe have embarked on austerity drives to tackle problematic public finances, the White House has continued with an economic-stimulus program and proposed a slower path of fiscal consolidation.
Mr. Geithner said this difference in strategy between the U.K. and U.S. reflects differing circumstances. The U.S. has a smaller deficit relative to its economy, better underlying growth dynamics and a smaller government, Mr. Geithner said.
"Our fiscal challenges are very different from what you face in the U.K. and Europe as a whole," Mr. Geithner said.
He said the U.S. and Europe share similar challenges in funding "unsustainably expensive" commitments on health care and pensions.
But he added, "Our demographics are better, our growth rates are higher and those commitments are less expensive for us than they are for most of Europe. "That's not a challenge for us of the next three years or five years. That's a challenge for us of the next 50 years."
Mr. Geithner also criticized the light-touch regulation of the financial system that existed in the U.K. prior to the financial crisis, saying it was deliberately designed to lure business away from the U.S. and Europe and ultimately proved "very costly."
Mr. Geithner said international change in the financial sector will be a very complicated long-term challenge. "We have to make sure we act on reform while the memory of the crisis is still acute," he said.