Zoellick criticizes Europe over debt crisis

Robert Zoellick said Wednesday that the nations did not act responsibly because they created a shared currency without ensuring that it would work.

“The global economy has entered a new danger zone with little running room as European countries resist difficult truths about the common responsibilities of a common currency,” Zoellick said.

Fears that Greece is headed for a default on its debt have roiled markets for days.

A Greek bankruptcy could destabilize other financially troubled European countries, such as Portugal, Ireland, Spain and Italy.

It would also be a severe blow to many European banks, which are large holders of Greek government bonds. Moody's on Wednesday downgraded the credit ratings of two French banks, Societe Generale and Credit Agricole.

Treasury Secretary Timothy Geithner said Wednesday that European leaders know that they have been “behind the curve” in dealing with the debt crisis. But Geithner said in an appearance on CNBC that European governments now understand the severity of the situation and have the financial resources “to do what it takes to hold this thing together.”