Obama, Italian PM to discuss European financial crisis
REUTERS WASHINGTON PRESIDENT Barack Obama hosts the prime minister of Italy on Thursday afternoon at the White House.
Obama and Prime Minister Mario Monti are expected to talk about a range of issues, including what Italy is doing to restore market confidence in the midst of Europe’s financial problems. The White House says the two are also likely to discuss Afghanistan, the Middle East, North Africa and the upcoming G8 and NATO summits in Chicago.
Monti’s two-day visit, say sources, to New York and Washington is aimed at persuading American investors that Italy can tame its $2.5 trillion debt. That’s bigger than that of Spain, Portugal, Greece and Ireland combined and about four times larger than Europe’s rescue fund. His success may be vital to reducing Italian borrowing costs and preventing the euro region from breaking up.
“There’s no European more important for Obama to meet right now to understand that European leaders are aware of the problems and are dealing with them,” Philippe Moreau- Defarges, a researcher at Parisbased French Institute of International Affairs. “There’s no European leader right now who understands better how the global economy works.” Earlier Obama said on Wednesday that Europe must not flinch as its leaders confront a raging debt crisis that he acknowledged could do real harm to the US economic recovery. In an interview with newspaper La Stampa on the eve of a White House meeting with Italian Prime Minister Mario Monti, Obama said the US would “do our part” to help, but stressed that the burden lay mostly with Europe.
“What is necessary now is for all European governments to show their absolute commitment to the future of economic integration in Europe,” Obama said in a text of the interview published on the Italian newspaper’s website.
“If Europe puts in place a large enough firewall, it significantly reduces the probability that it will need to be used,” he said, while praising Italy’s “impressive steps” to modernize its economy and cut national debt. Obama’s meeting on Thursday assumes importance as it aims at discussing Italy’s steps to restore market confidence and boost growth, “as well as the prospect of an expansion of Europe’s financial firewall,” the White House said. In Greece, facing a potentially devastating sovereign debt default, political leaders failed on Wednesday to sign off on a tough reform and austerity package needed to secure a vital 130 billion euro bailout, but talks were set to continue.
The US has said for months that Europe has the resources to tackle the crisis and Obama repeated that message in his interview. He did not try to play down US vulnerability to a slowdown in its most important trading partner.
“The US has an enormous stake in Europe’s growth and the Euro area’s success,” Obama said. He also said the United States “will continue to do our part to support our European friends as they work to resolve this crisis,” but gave no details on what that might mean in practice.