WASHINGTON — President Barack Obama met with top European Union leaders as the eurozone sovereign debt crisis entered a perilous new phase, with increasing worries about the sustainability of the 17-country monetary union and borrowing costs climbing to new peaks.
Again, he urged an immediate resolution to the debt crisis, saying the issue is “hugely important” for the United States but stressing that the answer to Europe’s problems lies in Europe.
The White House press secretary, Jay Carney, told reporters, “We continue to believe that this is a European issue, that Europe has the resources and capacity to deal with it, and that they need to act decisively and conclusively to resolve this problem.”
Obama met Monday with Jose Manuel Barroso, president of the European Commission; Herman Van Rompuy, president of the European Council; and Catherine Ashton, the European foreign policy chief.
The summit meeting came as the U.S. received a reminder of its own debt woes. Fitch Ratings lowered the country’s ratings outlook to negative from stable, although it maintained its sterling AAA grade for U.S. debt.
Fitch had said in August that a failure by the special bipartisan committee in Congress on deficit reduction would probably result in a negative rating.
Senior Obama administration officials describe a two-pronged policy response, expected to last for months, to the European crisis. First, in numerous private conversations and increasingly forceful public statements, policymakers are urging their European counterparts to take big steps and move fast to reassure markets. Second, Washington is increasing efforts to shelter U.S. institutions from European turbulence.
Obama and his policy team have said that there is no greater threat to the fragile U.S. recovery than a contracting and destabilized Europe — a belief repeated Monday.
“I communicated to them that the United States stands ready to do our part to help them resolve this issue,” Obama said. “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.”
On Monday, the Organization for Economic Cooperation and Development warned that the euro crisis was a drag on global economic growth.
“Decisive policies must be urgently put in place to stop the euro area sovereign debt crisis from spreading and to put weakening global activity back on track,” it said.
In light of the continuing troubles, Obama and Carney repeated the administration’s belief that Europe needed to quiet debt markets immediately. In past weeks, Treasury officials including Secretary Timothy F. Geithner and Lael Brainard, undersecretary for international affairs, have made the same call.
“It is crucial that Europe move quickly to put in place a strong plan to restore financial stability,” Geithner said at the Asia-Pacific Economic Cooperation meeting in Hawaii this month.