WASHINGTON (Reuters): President Barack Obama will press European Union officials on Monday to reach a definitive solution to their sovereign debt crisis which is emerging as a major 2012 U.S. election worry.
As Germany and France scramble to tighten budget controls across the euro zone, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso will face tough questions from Obama at the White House on how much longer the crisis might go on.
No breakthroughs are expected from the meeting, which will not include the European heads of state who need to make crucial decisions about the future of the 17-nation currency union.
But Van Rompuy and Barroso wield influence as heads of key EU institutions at the heart of efforts to fight the crisis, which has thrown the future of the euro zone into doubt at a moment of weakness for the global economy.
Obama has spoken regularly with German Chancellor Angela Merkel and French President Nicolas Sarkozy and the summit offers a chance for him to further ratchet up pressure behind closed doors.
“He understands that it is a European leadership issue,” said Heather Conley of the Center for Strategic and International Studies in Washington.
Obama and the EU officials will release a statement after their summit ends, with Obama almost certain to restate his confidence that Europe’s leaders can handle the crisis if they show the political leadership to do so.
He has previously said that calming markets would require “some tough decisions” in Europe but not spelled out precisely what those may entail. Some in Washington believe the European Central Bank could be more active in the crisis though that is an unpopular view across the Atlantic.
Seams have emerged between European capitals on how to salvage the euro and deal with a series of disappointing bond auctions. Barroso suggested last week that euro zone bonds could be issued once new budget laws are in place, provoking anger from Germany where Vice Chancellor Philipp Roesler said the proposal for joint debt issuance was “irresponsible.”
Avoiding contagion from Europe’s crisis is critical for Obama, whose re-election prospects next November hinge on his ability to shield the U.S. economy from another downturn and bring down the unemployment rate of 9 percent.
He traveled to the Asia-Pacific region this month to boost economic ties with that fast-growing region, widely seen as an effort to counterbalance weakness in Europe as the 2012 election approaches and Republicans hammer his jobs record.
Barroso and Van Rompuy will arrive to Washington with ideas about how to boost trade and investment across the Atlantic to try to stoke growth while the sovereign debt strains gripping Greece, Italy, Spain and elsewhere are addressed.
Those include efforts to support emergent sectors like electric cars, smart grids and nanotechnology -- for instance with less red tape and lower import tariffs -- and to encourage more raw materials trade.
Companies including Microsoft, Pfizer, Deutsche Bank and Coca-Cola said in a letter released before the summit that there were important business opportunities to be tapped across the Atlantic even if the U.S. and European economies were growing slowly.
“The United States and Europe remain at the heart of the world economy, each other’s most important market for goods, services, capital and ideas,” said the Trans-Atlantic Business Council, whose other members include Unilever, Intel, Siemens and Ford.
While economic worries will dominate their meeting, Obama, Barroso and Van Rompuy are also expected to discuss concerns about Iran’s pursuit of nuclear materials and Syria’s deadly crackdown on protesters as well as violent flare-up in the Balkans and in Eastern Europe.
Catherine Ashton, the EU’s top foreign policy official and former trade chief, and U.S. Secretary of State Hillary Clinton are is set to take part in the meeting that comes the day after the Arab League approved sweeping sanctions on Syria.
The European leaders are likely to be nudged in Washington to seek stronger sanctions against Iran, given Europe now has more commercial and energy ties with the country than the United States does. Both Washington and Europe have already introduced strong sanctions against Damascus.