Obama: No fears of double-dip recession

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President Barack Obama says the US and Germany have agreed that the economic crisis in Europe cannot be allowed to put the global economy at risk.

Speaking at a joint news conference with German Chancellor Angela Merkel, Obama said the US and Germany will continue to consult on the debt crises that have struck countries in Europe, including Greece.

Obama said the two leaders also discussed Nato-led military campaigns in Afghanistan and Libya, as well as Iran, during their meetings at the White House today.

Merkel's visit is her sixth trip to the United States since Obama took office. Later, Obama was to treat Merkel to a night of high pomp at the White House, awarding her the Presidential Medal of Freedom during a formal dinner. The gestures appear aimed at boosting a relationship that has seemed more cordial than close.

Taking note of the economic turmoil that has roiled both sides of the Atlantic, Obama said: "Recovery from that kind of body blow takes time."

"Our task is to not panic, not overreact," he said.

Obama sought to put to rest any suggestion his relationship with Merkel was in any way strained, praising Merkel's "pragmatic approach to complex issues" and saying that "it's just fun to work together."

Merkel, likewise, depicted a close relationship, although she acknowledged that "sometimes there may be differences of opinion."

Obama and Merkel, for example, have had differences on Libya, after Germany abstained in the UN vote that authorised a no-fly zone over Libya and kept its troops out of the Nato-led operation to enforce it.

Obama, without mentioning that, said Germany's deployment of resources in Afghanistan had allowed other Nato allies to increase support for the Libyans, and he stressed that both he and Merkel believe Libyan Leader Muammar Gaddafi has to step down.

When that happens, Obama said says he expects Germany to play a major role in Libya.

He said there will be much work to do in helping the Libyan people and the country's economy. He says he and Merkel discussed how Germany could contribute to those efforts during their meetings

Germany has thus far stayed out of the Nato-led bombing campaign in Libya. The US first took the lead when operations began in March, but has since handed over control to Nato allies, including France and Britain.

Obama says he and Merkel both believe Gadhafi must step down and that his removal from power is inevitable.

On Afghanistan, where Germany has 5,000 troops stationed mostly in the increasingly volatile north, Merkel said the two leaders were committed to stabilising the country not just militarily, but also in terms of bolstering its civil society, adding that "We will not abandon them."

"We wish to go in together, out together," she said of US and German troops. Both leaders face significant opposition to the war from their people at home.

The US has roughly 100,000 troops in Afghanistan, and Obama renewed his pledge to begin a significant drawdown of US troops this summer. Germany hopes to start a gradual troop withdrawal at the end of the year.