Obama heads overseas to tackle world economy

After 10 weeks in office trying to save the U.S. economy, President Obama is ready to take on the world economy. Whether the world is ready for his remedy remains in doubt.

Obama flies to London on Tuesday, then on to four other nations, for his first overseas trip since assuming office and with the global economy in shambles. It's one of the most anticipated presidential trips since John Kennedy went to Berlin in 1963.

Although much of the attention will focus on Obama, the world economy hangs in the balance. Obama will try to persuade leaders of the Group of 20 that they should act boldly to stimulate spending, stabilize financial systems and sidestep increased trade protectionism. He also has a reinvigorated war plan for Afghanistan to promote.

Still new on the world stage at 47, Obama will meet privately with at least six presidents, prime ministers and a king in London, then five more as he travels on to France, Germany, the Czech Republic and Turkey. He'll attend three summits, deliver two major addresses and hold a roundtable with students in Istanbul. He'll take time out to see Queen Elizabeth II at Buckingham Palace and sightsee from Strasbourg to Istanbul.

The goal of the trip, says Denis McDonough, deputy national security adviser, is nothing less than "restoring America's standing in the world." It will produce at least two story lines: one symbolic, one substantive.

In the first, Obama will likely be greeted warmly by Western European leaders, thanks to his popularity among their constituents.

"Barack Obama, for most Europeans, embodies the American dream," says Karen Donfried, executive vice president of the German Marshall Fund, which promotes trans-Atlantic cooperation. "It's what Europeans love about this country."

The second and more important theme is about dollars, pounds and euros. Although the president is popular, the U.S. financial collapse precipitated much of the world's problems. Senate Foreign Relations Committee Chairman John Kerry, D-Mass., says foreigners "blame the model that we exported."

Europeans who for years fretted over military preparedness and the threat of terrorism now are consumed with a financial meltdown that has cost millions of jobs — even those of government leaders from Iceland to Latvia. Obama's task is to lead by example and persuade colleagues to take many of the steps the United States has taken to fix their economies.

"Obama is adored by the general public but still has to prove himself to the governments," says Reginald Dale, senior fellow at the Center for Strategic and International Studies. "There's a real opportunity for the president to show global leadership."

A 'make-or-break event'

His first chance will come Thursday at the G-20 summit, a follow-up to one held by President Bush in Washington in November. Then, world financial markets were in crisis. Now it's the entire global economy, which could threaten global security.

Some Eastern European nations are on the brink of default, so the summit "is a make-or-break event," says international financier and philanthropist George Soros. Desmond Lachman of the American Enterprise Institute, a former International Monetary Fund official, says the task is huge: "how to prevent the global economy from imploding."

The major push-pull is between the U.S. emphasis on government spending and European nations' preference for more regulation.

Obama insists it's not a conflict. "This is not an either-or question. This is a both-and question," he said earlier this month. "Fiscal stimulus is only one leg in the stool. We have to do financial regulation."

Led by Germany, many G-20 members oppose more government spending as a way to kick-start their economies.

"I think it highly unlikely that countries will press for or agree on a numerical figure for stimulus," says Dan Price, senior partner for global issues at Sidley Austin and former assistant to the president for international economic affairs in the Bush administration.

Rather than risk being turned down, Obama won't seek more stimulus now. "Nobody is asking any country to come to London to commit to do more right now," says Michael Froman, Price's successor. "There isn't any single number that is sacrosanct."

That could leave a boost in lending capacity for the International Monetary Fund as the summit's most concrete achievement. An increase of as much as $500 billion, as suggested by the Obama administration, would be used to help developing nations.

Choosing words carefully

Then it's on to a NATO conference along the French-German border, not far from where candidate Obama attracted more than 200,000 people in July. There he will try to convince allies of the wisdom of sending 21,000 additional U.S. troops and trainers to Afghanistan, on top of 62,000 U.S. and NATO troops already there.

Where Bush regularly pressed NATO for more troops, Obama appears ready to settle for trainers and civilian aid. That's despite increasingly difficult fighting in the country's southern and eastern regions.

"We are not in an easy situation, there is no doubt," German Ambassador to the U.S. Klaus Scharioth said last week.

In Prague, Obama will hold a summit with the European Union. There he will meet leaders who negotiated with the Bush administration for a U.S. missile-defense system in the Czech Republic and Poland that Obama has not committed to build.

Having dealt with the thorny issues he inherited, Obama also plans to raise others: climate change, cybersecurity, nuclear proliferation. He plans to give a speech on proliferation in Prague.

The trip is set to end in Turkey, a nation that is 99% Muslim but has direct ties to the West. "Turkey has always been viewed as a bridge between East and West, a kind of stabilizing influence in the region," says Ibrahim Hooper of the Council on American-Islamic Relations.

In his inaugural address, Obama pledged to seek a new relationship with the Muslim world "based on mutual interest and mutual respect." As a result, his every move and phrase in Ankara and Istanbul will be closely followed.

"The words will have to be chosen very carefully," says Bulent Aliriza, director of the Turkey Project at the Center for Strategic and International Studies.

Contributing: Ken Dilanian