8 Oct 2011

Obama wants quick action on European debt

5:56 am on 8 October 2011

United States president Barack Obama has urged euro zone leaders to act fast to resolve their debt crisis, saying it poses a threat to America's faltering economic recovery.

The European Central Bank has announced it is offering unlimited loans to banks for as much as a year in order to stave off a possible credit crunch and the Bank of England says it's going to pump billions of dollars into the British financial system to boost economic activity.

President Obama said uncertainty about Europe posed "the biggest head wind currently faced by America".

He said he spoke frequently with the German Chancellor Angela Merkel and President Nicolas Sarkozy of France and believed they and their European colleagues understood the urgency of the situation.

He said he recognised the "political difficulty" of reaching agreement across the European Union but said his strong hope was that a concrete plan of action would emerge before the next G20 summit in November.

The BBC reports Mr Obama chose his words carefully, mindful that some US officials have been accused of lecturing Europe on how to fix its sovereign debt.