Obama says lack of political will to solve Europe

Wed Nov 16, 2011 5:31am EST
 
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By Laura MacInnis

CANBERRA (Reuters) - President Barack Obama said on Wednesday he was deeply concerned about the continued euro zone crisis, blaming it on a lack of political will, and that market turmoil would continue until Europe has a concrete plan to deal with its debt woes.

Obama praised French President Nicolas Sarkozy and German Chancellor Angela Merkel, along with Greece and Italy and their moves to form unity governments to implement reforms, but he was critical of wider Europe.

"The problem right now is a problem of political will. It is not a technical problem," Obama told a joint news conference with Australian Prime Minister Julia Gillard in Canberra.

"I think there is a genuine desire on the part of leaders like President Sarkozy and Chancellor Merkel, but they've got a complicated political structure," said Obama.

"We saw some progress with Italy and Greece putting forward unity governments that can implement some significant reforms. But at this point the larger Europe community has to stand behind the European project."

Obama's comments, some of the bluntest to date, added to a chorus of non-European policymakers urging greater action to deal with the 2-year-old crisis, and came as equity markets fell in response to a sell-off in euro zone bond markets.

"Until we put in place a concrete plan and structure that sends a clear signal to the markets that Europe is standing behind the euro and will do what it takes, we are going to continue to see the kinds of market turmoil we saw," said Obama.

Asian shares fell on Wednesday and the euro slipped to its lowest levels in a month against the dollar and the yen.   Continued...