US President Barack Obama says European leaders must make difficult decisions to steer the eurozone away from crisis.
Speaking at the White House, Barack Obama said the US would support Europe implement the hard solutions needed to solve the ongoing debt crisis.
He said a deep new recession in Europe would have an impact on the US economy.
Greece’s future in the eurozone was a matter for the Greek people, he said, but “further hardship” must be expected if it choose to leave the euro.
Barack Obama says European leaders must make difficult decisions to steer the eurozone away from crisis
Outlining a series of “specific steps” Europe needed to take to ensure stability within the eurozone, the president was at pains to say he would not “scold” Europe.
Barack Obama said European leaders needed to stabilize the continent’s financial system and inject capital into weak banks “as soon as possible”.
“The solutions are hard, but there are solutions,” Barack Obama said, saying the US was offering advice, but that “these decisions are fundamentally in the hands of Europe’s leaders”.
Barack Obama also reprised his calls for the US Congress to pass the remaining parts of his own jobs plan, in order to strengthen the US economy against possible shocks from Europe.
George Soros warns European leaders they have a “three-month window” to save the euro.
The billionaire investor said he believed Greece would elect a government willing to abide by loan conditions imposed by the EU in this month’s elections.
But George Soros said the German economy would begin in weaken in the autumn, making it much harder for Chancellor Angela Merkel to provide further support.
He said leaders did not understand “the nature of the crisis”.
George Soros also said that while European leaders were focusing on debt levels, the crisis was “more of a banking problem and a problem of competitiveness”.
George Soros warns European leaders they have a "three-month window" to save the euro
For this reason, he said they had “applied the wrong remedy”.
“You cannot reduce the debt burden by shrinking the economy, only by growing your way out of it,” George Soros added.
George Soros, speaking at a conference in Italy, was referring to the drastic austerity measures that have been implemented across Europe, measures that are now being questioned by a growing number of politicians and commentators.
Without policies to boost growth, which would enable governments to raise revenue to pay down debt, George Soros said time was running out for the euro.
“I expect the Greek public will be sufficiently frightened by the prospect of expulsion from the EU that it will give a narrow majority of seats to a coalition that is ready to abide by the current [bailout] agreement,” he said.
However, this would provide only temporary respite, he warned, as the German public becomes less willing to continue bailing out its weaker European neighbors.
“The crisis is likely to come to a climax in the [autumn]. By that time, the German economy will also be weakening, so that Chancellor Merkel will find it even more difficult than today to persuade the German public to accept any additional European responsibilities.
“That is what creates a three-month window.”