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Obama calls for action to solve euro crisis

The Local · 13 Sep 2011, 09:06

Published: 13 Sep 2011 09:06 GMT+02:00

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As long as Europe's sovereign debt crisis, “is not solved, we will continue to see weaknesses in the global economy,” he said on Monday night in an interview with several European news agencies.

“At the end of the day the big countries in Europe and their political leaders have to come together and make a decision on how they can bring currency integration together with a more effective and coordinated budget policy,” he said.

Although he did not specifically name Chancellor Angela Merkel, as the biggest economy in the continent, Germany is key to resolving the matter.

The situation in Europe would certainly have consequences for America, he said.

“We live in an integrated global economy today. What happens on the other side of the Atlantic or Pacific has considerable effect on America, on our entire continent, not just on the USA,” he said, adding that his government was working intensively with the Europeans to help try to solve the current crisis.

Merkel spoke on the radio on Tuesday morning calling for calm in the face of the crisis. “What we do not need is turmoil on the financial markets,” she told the public broadcaster rbb Inforadio. “The uncertainties are already big enough,” she said, adding everything must be done to hold the eurozone together politically.

She called upon the Greek government to increase its efforts to get spending under control, saying all economies in the eurozone had to do their homework and contribute to stability. “We can only have a currency union which includes 17 countries and where all have a stable euro, when we prevent uncontrollable processes,” she said.

European parliamentarian Elmar Brok, from Merkel’s Christian Democratic Union accused Economy Minister Philipp Rösler, from coalition partner the Free Democratic Party, of talking up a potential Greek bankruptcy after his comments on Monday that an orderly default could be possible.

“It is clear: the collapse of Athens would be the worst and most expensive solution for Germany,” he told the Rheinische Post newspaper. He said Rösler’s suggestion of an orderly Greek insolvency was unlikely. “The orderly bankruptcy of a state within the eurozone is not possible under current international rules,” said Brok.

A controlled waiver of half the debt could only be feasible if all creditors were agreed, which Brok said was unrealistic. “An uncontrolled state bankruptcy with a total cancellation of the demands would have incalculable consequences,” he said.

Government economics advisor Peter Bofinger warned of a possible chain reaction through the eurozone if Greece did not receive the financial help that had already been agreed.

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“If Greece does not get any more help, there will be an uncontrolled insolvency with the result that the Greek bank system will collapse and the risk of an enormous chain reaction which could be even worse than the Lehman collapse of 2008,” he told the Saarbrücker Zeitung on Tuesday.

“Greece needs more time to consolidate. The idea of giving quarterly deficit targets where in a quarter the economy has fallen by nearly seven percent is absurd,” he said.

DPA/DAPD/The Local/hc

The Local (news@thelocal.de)

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Your comments about this article

09:23 September 13, 2011 by The-ex-pat
Pot, kettle and US deficit come to mind..........................
09:24 September 13, 2011 by delvek
Is this clown serious? What plant is he on?

Last month his administration netted 0 (yes zero) jobs for HIS economy. The dollar is pathetically weak against the Euro. Who is this clown to "call for action" other economies to solve their problems?

I call to action Obama to vacate the office for the good of the globe. I also call to action Obama to write on the blackboard 1,000,000 times: Why do you look at the speck of sawdust in your brothers eye and pay no attention to the plank in your own eye?
09:25 September 13, 2011 by TheCrownPrince
He's the right one to talk about "a more effective and coordinated budget policy". 14 Billion Dollars public debt, Mr. President, how about that? As long this little problem is not solved, I guess "we will continue to see weaknesses in the global economy¦quot;.
09:28 September 13, 2011 by freechoice
Obama needs to fix the Global Economic Crisis, by first indicting the all conspirators related to the Banking Crisis of 2008!!! Otherwise change is definitely not coming to America.
09:29 September 13, 2011 by frankiep

It's called arrogance, Obama's "best" quality.
09:31 September 13, 2011 by freechoice
Watch Inside Job!!

It will shock you more than 911!
10:09 September 13, 2011 by lwexcel
The next financial crisis starts in Europe, you can either realize and accept it or keep looking back to find someone else to blame.
10:51 September 13, 2011 by delvek
Not sure where you are getting your news from but you should check out the United States, their crisis hasnt even begun.

The "tip of the iceberg" analogy comes to mind.
11:51 September 13, 2011 by auniquecorn
Iisten to all you whiners, of course it´s europes fault. Grow up, and take your medicine like a big kid.

12:06 September 13, 2011 by lwexcel
Its not 'news' its analysis, and there is really no need to debate it, we just have to wait and see. We are at the tipping point right now so it will not take very long anyway.
12:08 September 13, 2011 by LancashireLad
auniquecorn - please explain your reasoning behind "it's all Europe's fault".

Are you trying to say that Europe is responsible for America currently having the biggest financial debt ever known? I don't think you are going to be taken seriously.

Iwexcel - "the *next* financial crisis will start in Europe". There you are correct. Nobody is trying to deny that. But it strikes me that Obama is trying to ofset some of the pressure of the USA's current predicament. Please also remember he inherited a ridiculously high debt - he didn't create it.
12:23 September 13, 2011 by lwexcel
LancashireLad - 'But it strikes me that Obama is trying to ofset some of the pressure of the USA's current predicament.' This is true as well, but this is what politicians do. They publicly ostracize others while trying to sweep their own problems under the rug to be dealt with at a later date. It wasn't too long ago that everyone in Europe was 'calling for action' with regards to the US budget issues, and although the issue is not yet settled (if it ever will be is a matter of debate) it is definitely the euro zones turn to receive a bit of public 'finger wagging.' The leaders and businesses in these countries are allowing the euro zone to fall into chaos, and to become upset because someone says they should get their house in order, simple arrogance or ignorance.
12:40 September 13, 2011 by Englishted
Stop ! It was banker's greed that started this and none have been brought to book,

and they are still getting bonuses.

Stock markets rise and fall it is just a gambling den with no sense of the real world. Media coverage is blowing it up until the next story comes along.

Wake up and stop being conned.
12:51 September 13, 2011 by JDee
if you have any significant savings now is the time to get them out and switch them into something tangible, i.e. land / property, precious metals. Germany property, in particular seems to be a no brainer, especially the bargains that can be had as you move away from the city. Don't look back in 5 years with huge regret, now is the time to act. Plus, if you are removing cash from the banking system, you have the added pleasure of removing support for the crooks.
13:01 September 13, 2011 by freechoice
what is tangible? everything will be wipe out when disasters come!!
13:11 September 13, 2011 by LancashireLad
Iwexcel. If I remember correctly, Europe was calling for action against the bankers much more than the government debt itself. The only finger wagging the Eurozone should receive is for the creation of the Euro in the first place. I stil don't understand how anybody could think it would work.
13:37 September 13, 2011 by lwexcel
LancashireLad - I think you may be misunderstanding the event that I am referring to. I am speaking about the issue of raising the debt ceiling that took place on August 2 of this year, an event in which banks were not involved.

One of the quotes given was:

Wolfgang Schäuble, had a suggestion. ¦quot;The parties in the U.S. should be conscious of their responsibility to global financial markets,¦quot; he said Friday.

(The New York Times July 29th 2011)

The creation of the Euro was a good idea, but it is failing because of mismanagement.
13:53 September 13, 2011 by LancashireLad
Indeed I didn't have that in mind but considering that the US has raised this ceiling over 80 times since WWII without any of the theatre and custard pie throwing that this one got you can sort of understand it when everyone and his dog wades in with their own opinion. The US did sort of paint a target on themselves on that one.

With the world being as smal as it it today, any major finaincial event will have repecussions around the world, but if Greece fails, it will have less of an effect than would the failure of the US.
13:59 September 13, 2011 by lwexcel
Yes of course, but this time it is Europe's turn.

Greece is smaller than the U.S. but much larger than Lehman Brothers and Bear Sterns, which is where the financial crisis of 2008 began. The systematic financial loss that comes from Greece's bankruptcy is what everyone should be worried about.
14:25 September 13, 2011 by delvek
@ Jdee

Your 100% correct, just closed this week on another real estate investment here in Germany. Great deals to be had!

Loving it :)
15:32 September 13, 2011 by Wyatt
Obama Added More to National Debt in First 19 Months Than All Presidents from Washington Through Reagan Combined! And now his plan to aid this crisis is to borrow and spend another 447 Billion Dollars we don't have. This is no more than another Bail Out, and will be a failure just like the first one,Obama needs to get the U.S. under control, than worry about Europe.
15:32 September 13, 2011 by mike_1983
this drongo has got to be kidding!!! clean up his own backyard of 14 TRILLION in debt before he starts offering advice to others...... I'm still speechless from this!
16:02 September 13, 2011 by ATM
I have supported Obama in the last election and will do so in the next. No president alone is responsible for the economic crisis. It is a combination of an ineffective government oversight and corrupt business practices that brought the US to its knees. In this case I would advise Mr. Obama to let Europe handle Europe. First of all the whole Euro Zone was bound to fail due to the extreme social and economic differences across Europe. Why should Germany should the blame for other countries failure to manage their economies. Other countries have fallen and reenergized themselves. Greece, Portugal and Spain may have to do that. So Mr. Obama: Kanzerlin Merkel has this football to carry. Thanks for your concern but she has it.
16:43 September 13, 2011 by derExDeutsche
Its over Folks, Unionized Greek Tax Collectors have now gone on strike.

@All those who believe it is ALL the EVIL BANKERS FAULT, educate yourselves . Your hate of a free market is clear, but your logic is not. Bankers try to make money, yes. If I tell my banker to buy and sell my stock at a certain prices, it is not the bankers fault, if my bank account goes broke due to those transactions, and it certainly is not the bankers job not to take a commissions. The person who's bank account was emptied was the Peoples. The instructions were given to those Bankers by our elected politicians.

18:18 September 13, 2011 by Major B
@ freechoice and englisted

Your first comments are on target.

some of the comments by others are mixing apples, oranges, grapes, plums etc, ect, ect. all together.
19:50 September 13, 2011 by finanzdoktor
@ATM: Why does Kanzerlin Merkel have to carry this football? For the so-called euro-zone experiment? Shouldn't each country (e.g., Greece, Italy, France, GB, ...) carry their own football?

Might I also suggest/recommend getting a used economics and/or finance textbook and do some serious reading. Investments come with risks. And, with foreign/international investments, comes country risk. You cannot expect high returns with no risk. Totally not reality.

In the past, country risk was reflected in the movements of respective exchange rates. However, with a common currency, about the only thing that can change to reflect inherent risk is interest rates, witness what is happening in respective sovereign bond markets.

Cannot have your cake and eat it, too. Not without risk.
22:19 September 13, 2011 by TheChanger

I agree with what you are saying for the most part. I believe what people are forgetting is that these remarks are being taken out of context of the rest of the interview. What is quoted here in TheLocal is a response to a direct question about the Euro-Crisis. It would not make sense to incorporate the problems of the US with those of the Eruozone because the two problems by and large are completely different monsters. The USA has issues with debt, mainly beause of mismanagement of this country at the highest levels and greed from all corners. The Eurozone issues are based more on the inability to insure that all countries in the EU are playing by the same rules and following the same safe practices. Two completely different issues and when asked about directly I think the answers fit.


I believe ATM was referring to Merkel carrying the football in regards to Germany. ATM even states in his/her post that Germany should not have to shoulder the issues of the other EU nations and perhaps these countries should be allowed to fail and prop themselves back up.

Might I suggest you read the entire post that you are commenting on and ensure you understand it before firing off a rant that truly has no merit whatsoever. No one has stated that investment should not have risk, and no one has stated that Germany should fix all of the problems. I believe the closest to this is the statement that as the strongest economic power in the EU, Germany may play a significant part in the solution. As Germany is doing quite well, perhaps that would be a good thing?
23:09 September 13, 2011 by ChrisRea
@ Wyatt # 21

"Obama Added More to National Debt in First 19 Months Than All Presidents from Washington Through Reagan Combined!"

Really? Obama added USD1,653 billion to US public debt, while Reagan added USD1,873 billion. But by far the top performer is George W. Bush, with USD6,106 billion. What figure do you have?
02:28 September 14, 2011 by Wyatt
http://www.theblaze.com/stories/obama-beats-bushs-u-s-debt-accumulation-in-less-than-half-the-time/ Plenty of information out there on the debt subject.
04:45 September 14, 2011 by derExDeutsche
Be careful what you say about the 'Great Leader ' !!! The Attack Watch will come for you, too !

21:00 September 14, 2011 by finanzdoktor
@TheChanger and ATM: Your comments are noted and acknowledged. Also, I should have stipulated that the last three paragraphs of my comments were not directed at ATM, but actually for everyone, including myself. Better????
01:38 September 17, 2011 by hanskarl

Is this clown serious? What plant is he on?

It is called cannabis and most likely he is washing it down aith French fries and good old American urine beer. The man is a nut job to say the least. Never has there been a more arrogant head of state since at least the early 40's. He makes me want to hurl. He is an embarrassment. And then he sends his lackey Timmy to the Euro summit like they are going to tell Europe how to solve a debt crisis. What a dork.
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