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Obama Applauds European Economic Efforts

  • Kent Klein

Presidents Obama (r) and Putin at the G20 meeting in Los Cabos.

Presidents Obama (r) and Putin at the G20 meeting in Los Cabos.

LOS CABOS, MEXICO - President Barack Obama is welcoming statements by Europe's major economic powers that they will work toward a plan for growth and an integrated banking system. The president spoke Tuesday, at the end of the annual Group of 20 economic summit in the Mexican resort of Los Cabos.

President Obama says the leaders of Europe's G20 countries answered the concerns of world markets about their willingness to do what is required to hold the euro currency zone together.

“Over the last two days, European leaders here in [Los] Cabos have made it clear that they understand the stakes, and they pledged to take the actions needed to address this crisis and restore confidence, stability and growth," said President Obama.

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The president returns to Washington with an indication from the European leaders that they will make a coordinated effort to promote economic growth, something Obama and several other leaders have been urging.

Growth and job creation are mentioned very early in the G20 leaders' statement at the end of the summit.

“I welcome the important steps that they have already taken to promote growth, financial stability and fiscal responsibility," said Obama.

The statement of unity was intended to reassure world markets, which appear worried about Greece's effort to form a coalition government and a bank bailout for Spain.

German Chancellor Angela Merkel has been under increasing pressure to endorse the job creation approach and retreat somewhat from the budget cuts she has been advocating for European nations burdened by vast debt.

President Obama's re-election could depend, in part, on the outcome of the eurozone situation. The state of the economy will be one of the main issues in this year's campaign, and the administration says the euro crisis is one of the factors holding back America's economic recovery.

The president stressed to the European leaders in Los Cabos that the eurozone crisis is affecting the U.S. economy, as well as those in other parts of the world.

Under pressure from Obama and other leaders, Europe's G20 members also agreed to move toward a more integrated banking system, including a common regulatory system and insurance for depositors. They did not say how long it would take.

U.S. Undersecretary of the Treasury Lael Brainard told reporters Monday that Europe is making progress toward a resolution, but she advised being patient.

“Some of the medium-term reforms that they are talking about involve a really very significant step forward on integration," said Brainard. "And so these are moves that are going to require political reforms, as well as financial reforms, and so, you know, they will take some time.”

In addition to talking with European leaders on Tuesday, President Obama met with Chinese President Hu Jintao. Before the meeting, Obama said job creation and the situation in Syria would be among the items discussed.

China has pledged to contribute $43 billion to the International Monetary Fund's emergency bailout fund. Fellow emerging economies India, Brazil and Russia have promised $10 billion each, bringing the fund's total to $456 billion.

Obama also met Tuesday with Turkish Prime Minister Recep Tayyip Erdogan. The White House says they discussed moving Syria toward a peaceful political transition that leads to democracy, among other issues.
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