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Obama To Push G20 To Tackle Long Term Debt Issue

  • Kent Klein

US President Barack Obama (File Photo)

US President Barack Obama (File Photo)

President Barack Obama goes to the G20 economic summit in France this week with hopes of helping Europe move toward a long-term solution for its debt crisis. The president is also trying to convince the other G20 countries that America’s economic and political problems can be overcome.

Europe’s debt crisis will be at the top of the agenda at this week’s summit in the French resort city of Cannes, involving 20 of the world’s largest industrial countries and international organizations.

Last week’s agreement by the European Union to enlarge its bailout fund and to cut Greece’s debt in half will likely ease some of the pressure on the G20 countries.

President Obama called the agreement an important first step toward long-term global economic growth. But he said more work lies ahead. “The key now is just to make sure that it drives forward in an effective way," he said.

Some experts agree that the EU agreement is only the beginning of the solution.

Matthias Matthijs is an assistant professor of international political economy at American University in Washington. “It still has a bit of a whiff of kicking the can, maybe, down the road for a couple of months this time. But the main problems are still there," he said.

America’s economic and political problems may also come up at the G20. Stubborn high unemployment has stifled the US economic recovery.

And partisan bickering caused a debt crisis, which led to US debt being downgraded and questions from other countries about whether Washington is competent to address its economic problems.

White House Press Secretary Jay Carney assures the G20 partners that the president is making progress on these issues. “So he carries with him to France the fact that we are pushing our Congress to act on these matters, and he comes as the leader of the largest economy in the world and a great friend and ally of a great many nations," he said.

Another of Mr. Obama’s priorities in Cannes is to push for greater access to overseas markets for American exports. “We’ve got to get into a posture where the U.S. is always going to be a big market, and we’re going to welcome goods from all around the world, but we’ve also got to be selling goods around the world," he said.

In addition, professor Matthias Matthijs says the president will continue to bring up the sensitive issue of the value of China’s currency. “So basically, the United States is the debtor country and thinks that the Chinese are exporting because of unfair trade practices, and then the Chinese think that the Americans basically print too much money and manipulate their economy that way," he said.

Scheherazade Rehman, the director of George Washington University’s European Union Research Center, doubts that the president’s views on China’s currency will get much European support. “They are so caught up in putting out their own fires that they cannot fathom that this is a good time to bring up a currency war with China. From President Obama’s point of view, this is a good time, so he can show the American people that ‘Look, we are going to do whatever we can to keep jobs at home," he said.

These and other issues will be covered in just two days. Mr. Obama and the other G20 leaders arrive in Cannes early Thursday and leave late Friday.