Tags: BNALL | BNCOPY | BNK | BNSTAFF | BNTEAMS | BON | BUSINESS

Obama: Europe Needs 'Decisive' Action on Debt

Monday, 28 Nov 2011 03:59 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

President Barack Obama is pressing European Union leaders to keep moving quickly to resolve the two-year-old euro-zone debt crisis before it hobbles the global economy.

Obama began a White House summit this morning with European Council President Herman Van Rompuy, European Commission President José Manuel Barroso and foreign-affairs chief Catherine Ashton.

Iran’s nuclear program, strengthening exports and investments, Middle East peace prospects, terrorism and cyber crime also are on the agenda for annual meeting.

The president’s message is that “Europe needs to take decisive action, conclusive action, and it has the capacity to do so,” White House spokesman Jay Carney said.

The summit comes as European finance chiefs are set to meet this week to discuss a rescue plan, and days ahead of a Dec. 2 report by the U.S. Labor Department on the nation’s unemployment rate for November. The rate for October was 9.0 percent.

About $4.6 trillion was wiped from the value of global equities this month on mounting concern that Europe’s debt crisis is spreading.

Crisis Escalation

Moody’s Investors Service said today the “rapid escalation” of the crisis threatens all of the region’s sovereign ratings, and the Organization for Economic Cooperation and Development said doubts about the survival of Europe’s monetary union has caused global growth to stall.

“The euro-area crisis represents the key risk to the world economy,” the Paris-based OECD said. Government bond yields for both Germany and France, Europe’s two largest economies, climbed last week as a German bond auction failed to get bids for 35 percent of the 10-year debt on offer.

News of a possible framework for a rescue plan helped push global stocks higher for the first time in 11 days. The MSCI All-Country World Index added 3.1 percent at 11:06 a.m. in New York, snapping its longest slump since 2008, and the Standard & Poor’s 500 Index rallied 3 percent.

The euro strengthened 0.8 percent to $1.3339. The yield on the 10-year German bund advanced four basis points, with the similar-maturity Treasury yield jumping seven points.

Political Will

Obama has been calling on European governments to act decisively on a plan to address the crisis. Leaders must summon the “political will” among the 17 nations that use the euro to take steps to ensure fiscal discipline while stabilizing markets, Obama said Nov. 4 in France as the leaders of the G-20 ended a summit.

Van Rompuy and Barroso are top leaders of European institutions having influence over a final resolution, though France and Germany, the largest European economies, are critical to any success.

Obama has spoken frequently with German Chancellor Angela Merkel and French President Nicolas Sarkozy, and today’s White House meetings gave him a chance to further increase the pressure. Neither head of state is attending today’s summit.

Carney said the European crisis is a reminder that the global economy is interlinked and the U.S. must do its part as well to help growth. He said the president’s push to extend a temporary cut in the payroll tax is one way to make sure the U.S. recovery continues.

Economists from Morgan Stanley, UBS AG, and Nomura International Plc say governments and the European Central Bank must step up their crisis response.

“Skepticism has grown that euro-area policy makers can deal effectively with the key challenges they face,” Pier Carlo Padoan, the chief economist at the Paris-based OECD, said today as he cut forecasts for European and global growth.

The financial crisis in such countries as Greece and Italy has eroded the euro’s stability and disrupted global markets. France and Germany, Europe’s largest economies, want changes in treaties to ensure improved fiscal discipline.

--With assistance from Simon Kennedy in London. Editors: Joe Sobczyk, Robin Meszoly

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net Margaret Talev in Washington at mtalev@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Harry Reid Pleads to Democrat Supporters: 'I'm Begging You'

Friday, 31 Oct 2014 22:25 PM

Senate Majority Leader Harry Reid begged Democratic voters on Friday to help the Democratic Senate Campaign Committee re . . .

John Kerry Officially Apologizes to Israel's Netanyahu

Friday, 31 Oct 2014 21:48 PM

Secretary of State John Kerry phoned Israel's Prime Minister Benjamin Netanyahu Friday to apologize for the crude commen . . .

Mexico Judge Orders Release of Marine

Friday, 31 Oct 2014 20:34 PM

A Mexican judge has ordered the immediate release of a jailed U.S. Marine veteran who spent eight months behind bars for . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved