Obama summit addresses Europe's debt crisis

WASHINGTON -- President Obama told leaders of the European Union on Monday that the continent's escalating debt crisis must be solved "in a clear and forthright way."

As the crisis that has threatened Greece, Italy and several other southern European nations shows signs of spreading north to Germany and elsewhere, Obama seemed content with reports from European Council President Herman Van Rompuy and European Commission President José Manuel Barroso.

"The United States stands ready to do our part to help them resolve this issue," Obama said after an informal White House summit. "This is of huge importance to our own economy. If Europe is contracting or if Europe is having difficulties, then it's much more difficult for us to create good jobs here at home, because we send so many of our products and services to Europe."

That's the message Obama and other administration officials have been sending for months, including at the recent Group of 20 summit in France. Obama has been in frequent touch with German Chancellor Angela Merkel and French President Nicolas Sarkozy to urge that a rescue package be fleshed out and implemented quickly.

The White House summit came after another spate of bad news in Europe, including a poor German bond auction and new reports indicating that the euro-zone crisis is worsening.

In its latest economic outlook, the Organization for Economic Cooperation and Development said that without decisive action, the debt crisis could "massively escalate economic disruption." Moody's Investors Service said that could threaten all of the euro area's government bond ratings.

Barroso said the European Union understands the magnitude of the debt crisis and is taking the necessary steps. He said he has "full confidence" in European leaders' ability to resolve it.

"We are absolutely serious about the magnitude of the challenge," Barroso said. "But you have to understand that sometimes, some decisions take time."

Van Rompuy said the EU has taken several measures to tackle the crisis that "were unthinkable just a year ago."

"All member-states of the union are all engaged in policies of fiscal consolidation and strengthening competitiveness via comprehensive reforms. But we have to do more," he said.

Along those lines, Van Rompuy said he would present a "road map" for stronger fiscal and economic discipline to European leaders on Dec. 9.

But the two leaders had an equally important message for the United States: It, too, must get hold of a $15 trillion national debt that's nearly the size of the entire U.S. economy.

"We face the common challenge of bringing debt under control, while re-launching growth and creating new jobs," Barroso said. "We all know this is not an easy task."

A joint statement issued after the summit read in part: "The United States welcomes the EU's actions and determination to take all necessary steps to ensure the euro area's financial stability and resolve the crisis. The EU looks forward to U.S. action on medium-term fiscal consolidation."

Heather Conley, director of the Europe program at the Center for Strategic and International Studies, called the summit "a missed opportunity."

"There needed to be urgency. There needed to be some really decisive results," Conley said. "This is a defining moment. And quite simply, we're left with very, very little."