In a wide-ranging talk at the US Embassy in Berlin, the ambassador warned that Europe's sovereign debt woes would likely to continue for the foreseeable future.
“It's going to take longer than any of us would like. It's going to continue to be challenging for an extended period of time,” Murphy told The Local in his office overlooking the Brandenburg Gate.
“But at the end of the day, Europe will get through this. And I would even venture to say that Europe will be stronger in many respects.”
Reiterating Washington's call for the European Union not to focus solely on austerity measures favoured by Germany, Murphy called for efforts to boost growth in floundering eurozone nations like Greece and Spain.
“If you don't have a growth agenda that's alongside getting the pipes more deeply connected, you'll have too many [out of work] young people – particularly in places like Spain where you've got extraordinarily high youth unemployment. Something has to be done about that,” he said.
The ambassador said the crisis had exposed the need for greater political and economic integration to ensure the euro's survival: “It's hard to believe you could have a currency with 17 countries that aren't more tightly and deeply knit.”
A former investment banker who ran Goldman Sachs' German operations in Frankfurt from 1993 to 1997, Murphy also stressed the need to take immediate steps to restore the capital markets' confidence in the eurozone.
“So that countries that need to finance or refinance can do so at rates that are reasonable and reflect the realities of their credit. That has to be a ‘here-and-now' agenda,” he said.
Bucking up Berlin
Saying the euro remained “a brilliant notion” to bind Europe together, Murphy rejected the suggestion that Washington expected Berlin to take specific action to stem the ongoing crisis.
“I wouldn't use that verb choice. It's not expecting what Germany should do. We talk to Berlin all the time as we do with the big capitals and Brussels all the time,” he said. “We buck each other up. We share best practices. It's an open channel at the highest levels, and very constructive.”
But with American officials fearing an implosion of Europe's single currency could halt the sluggish US recovery, Murphy was also clear on how much Washington was counting on Berlin to resolve the festering crisis.
“This is of enormous importance to us,” he said. “The depth of the economic relationship between Europe and the United States – and particularly Germany and the United States – cannot be underestimated.”
Since his appointment by President Barack Obama in 2009, Murphy has worked to deepen America's economic ties with Germany - but also foster the cultural bonds between the two countries.
A political appointee holding a top fund-raising position for the Democratic Party before becoming ambassador, Murphy has taken to the diplomatic life with gusto, bringing his own unpretentious style to the role of being America's top envoy to Berlin.
“It's a humbling opportunity to be intimately involved in one of the closest relationships our country has in the world – it's a big deal for me every day,” he said.
At home in New Jersey, the ambassador, his wife Tammy and their four children also clearly enjoy living in Germany. The Murphys have chosen to spend part of their summer vacation in Baden-Württemberg and Brandenburg. And as a family of devoted soccer fans, they have even adopted the beleaguered Berlin football club Hertha BSC.
In his office in heart of the German capital, Murphy could at times hardly contain his enthusiasm when talking about the past three years.
“We love it here. We've had an extraordinary experience. Professionally certainly, but the family experience has been exceptional, he said. “It's been a game-changing experience for all of us. We get out and about.”
An affable envoy
It's quite a departure from the past two US ambassadors to Berlin – while former businessman William Timken was a drab diplomatic functionary, US Senator Dan Coats spent most of his time barely containing his outrage over the Germans' temerity to oppose the invasion of Iraq.
By contrast, the affable the 55-year-old Murphy has proven an effective advocate of US interests – frequently disarming his hosts by speaking American-accented German.
His suave people skills have helped bridge disagreements on global economic policies between Berlin and Washington, as well as smooth over WikiLeaks' embarrassing release of diplomatic cables revealing the US Embassy's deeply unflattering assessment of members of Chancellor Angela Merkel's government in 2010.