President Barack Obama exhorted European leaders yesterday to stiffen their backs and show the "political will" necessary to save the eurozone from implosion suggesting that absent "tough decisions" the continent's debt crisis will quickly get worse.
The dispensing of diplomatic niceties by Mr Obama, who was speaking at a joint press conference with Australian Prime Minister, Julia Gillard, in Canberra, showed how anxious the United States is becoming about the impact that an unravelling of the eurozone would have on its own economy and also globally.
"The problem right now is a problem of political will. It is not a technical problem," Mr Obama remarked as pressures continued to mount not just on the barely born governments in Italy and Greece but also on the leaders of other European economies including Spain and, at the core of the European Union, France.
Mr Obama paid tribute to the efforts of the leaders of France and Germany, Nicholas Sarkozy and Angela Merkel, to confront the problem and acknowledged that the formation of new governments in Greece and Italy represented progress. But he said bolder collective action may be needed to tell markets that stifling the euro is not an option.
"At this point, the larger Europe community has to stand behind the European project," he said. "We're going to continue to advise European leaders on what options we think would meet the threshold where markets would settle down. It is going to require some tough decisions on their part. Ultimately, what they are going to need is a firewall that sends a clear signal: we stand behind the European project, we stand behind the euro."
Europe might not like being lectured by the US, which has its own debt problems after all. Attempts by Secretary of State Tim Geithner to push his European counterparts to attempt bolder solutions to solve the sovereign debt problem have mostly been coldly received, even if Mr Geithner perhaps more than anyone knows just how swiftly chaos in the financial system can take hold, especially if just one major banking institution falls over the cliff.
Mr Obama is presiding over an economic recovery in the US that by any measure is fragile. Were it to falter, his hopes of holding on to office next year would be gravely diminished. It could be that the greatest threat to the US recovery today is what is happening in Europe.Reuse content