Sun October 30, 2011
Obama's Economic Trip Across The Pond
AUDIE CORNISH, host: Efforts to solve the European debt crisis are sure to be front and center when leaders of the 20 big countries that make up the G-20 meet in France later this week. President Barack Obama arrives in France on Thursday for the summit meeting. And NPR's Scott Horsley joins us for a preview. Hey there, Scott.
SCOTT HORSLEY: Hi, Audie. Good to be with you.
CORNISH: So, is there any relief at the White House that European countries appear to be getting a handle on the Greek debt crisis?
HORSLEY: I think there is, yes. Size of relief all over the world actually. The White House spokesman said that he welcomes the steps to address the Greek crisis, to shore up the European banks and prevent the contagion from spreading to other countries in Europe. At the same time, the White House is adding a word of caution saying it wants to see all of those agreements actually implemented and in a speedy fashion. The U.S. has a really big stake in seeing this issue solved. The president wrote in a Financial Times column this past week that the European Union is America's single largest economic partner. And we've seen in the last few months just how the worry over Europe's debt has weighed on our economy in this country. And that's true for the other members of the G-20 as well.
CORNISH: So, is the U.S. offering any help for Europe as it's wrestling with the debt problem?
HORSLEY: Well, not financial help. The metaphor that has been used a lot is, you know, when your neighbor's house in on fire - in that case, the United States is not offering a hose, but we're certainly applauding is the European firefighters' rush into the burning building. The president and the Treasury secretary, Tim Geithner, have said repeatedly they have confidence that Europe has the financial wherewithal to meet this challenge. The subtext of that: don't come looking to us for help. Now, some of the other G-20 players might play a role. China has been asked for help, and the United States could play an indirect role through the IMF. But for the most part, we're sort of an interested spectator, a cheerleader here, but not quarterbacking the rescue.
CORNISH: President Obama said that the world is looking for the same kind of leadership from the G-20 that is showed in 2009, right, during the debts of the global recession. Are we likely to see anything like that?
HORSLEY: No, you know, if you think back to 2009 when we were really going through the worst of this, the G-20 showed pretty remarkable levels of cooperation in beating back the recession. But since the really scary part of the downturn passed, we've seen more fractures within this group of countries. They've tended to fall back into their more parochial roles. And there's been a sort of tug-of-war between the countries that are pushing for more stimulus and those that are calling for more austerity. Secretary Geithner has said the big mistake the countries make trying to recover from a financial crisis like we've gone through is to take their foot off the gas pedal too quickly. At the same time, some of the European countries like Germany have been saying, you know, let's put on the brakes here. So, there have been question raised about just how effective this big group of 20 countries can be. One analyst I spoke to said the G-20 tends to function best in a crisis. So, the silver lining of the Eurozone debt crisis may be that it focuses the mind of the G-20 members.
CORNISH: This tug-of-war between austerity and stimulus sounds remarkably familiar, right? I mean, it's pretty much what we're hearing on Congress here at home.
HORSLEY: Sure. That's the very same debate we've been having in the United States where the president wants to see more aggressive action by the government to boost the economy. Republican Congress members have said that the original stimulus didn't work and they want to instead attack our deficit. We did get some good news this past week - a report that the economy grew at two-and-a-half percent in the third quarter. That is some reassurance that we're not going to go into a double dip. But the economy's still not growing fast enough, and so the president's been pushing his jobs plan. But he hasn't had much luck, as you say, pushing it through Congress, and so it's going to be tough for him to lecture to the rest of the world about how to put the global economy on a more solid economic footing.
CORNISH: NPR White House correspondent Scott Horsley. Thank you so much, Scott.
HORSLEY: Always a pleasure, Audie. Transcript provided by NPR, Copyright National Public Radio.