Eurozone debt crisis poses risk to US economy: Obama

Eurozone debt crisis poses risk to US economy: Obama 

Sat Jun 9, 2012 8:37AM GMT

US President Barack Obama speaks to the media on June 8, 2012 at the White House in Washington,DC.

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The decisions required are tough but Europe has the capacity to make them.”
US President Barack Obama

US President Barack Obama has called on European leaders to act quickly and make “decisive actions” to steer the eurozone away from crisis and stabilize the continent's financial system.

The simmering eurozone debt crisis posed a big threat to the US economic recovery, said Obama in a press conference at the White House on Friday.

"The decisions required are tough but Europe has the capacity to make them,” said Obama amid rising concerns in the US that the economy is being affected by the situation in Europe.

Obama noted that European leaders, however, understand “the seriousness of the situation and the urgent need to act.”

Addressing the Greeks ahead of elections to stay in the single currency region, he said that Greece's future in the eurozone was a matter for the nation itself.

“But the Greek people also need to recognize that their hardships will likely be worse if they choose to exit from the eurozone," the US president said.

Greece is the epicenter of the eurozone debt crisis. It is headed for the second parliamentary elections, expected on June 17, following a political impasse since May 6 elections, when no party gained enough seats to form a government and efforts to create a coalition government ended in failure.

There are worries that more delays in resolving the eurozone debt crisis could push not just Europe but much of the rest of the developed world back into recession.

Obama went on to call on the eurozone to focus on economic growth and job creation, not just “cutting and cutting and cutting” spending to deal with debt crisis.

As the German coalition government stresses on austerity measures to resolve the EU debt crisis, France’s new socialist government prefers economic incentives for growth in the eurozone which is against the German-driven austerity measures.

Referring to US ailing financial system, Obama said on Friday the US economy was "not doing fine," stressing that budget-pinched states needed help.

“It is absolutely clear that the economy is not doing fine, that's the reason I had a press conference," the president said.

Slumping job growth has alarmed some economists who fear the United States economy is in trouble.

The United States and Europe plunged into a deep financial crisis in 2008. This came after the US housing market ran deep into crisis and then the problem spread to European banks whose collapse could majorly impact the US economy once again.