Wednesday

16th Aug 2017

Obama endorses French ideas ahead of EU summit

  • Obama: 'I think about my one Congress, then I start thinking about 17 congresses and I start getting a little bit of a headache' (Photo: whitehouse.gov)

US leader Barack Obama has effectively taken France's side against Germany in the EU debate on the financial crisis.

Speaking to press in off-the-cuff remarks after a Nato summit in Chicago on Monday (21 May), he endorsed three ideas championed by France on how to stop Greek contagion and how to prevent recession from bringing down Italy or Spain: a massive EU bail-out fund; lower interest rates; and an EU-level strategy on growth.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"We've got to put in place firewalls that ensure that countries outside of Greece that are doing the right thing aren't harmed just because markets are skittish," he said.

"We've got to make sure that there is a growth strategy to go alongside the need for fiscal discipline, as well as a monetary policy that is promoting the capacity of countries like a Spain or an Italy that have put in place some very tough targets and some very tough policies, to also offer their constituencies a prospect for the economy improving."

In a fourth point, he urged the Union to recapitalise its banks "so that investors have confidence."

Without naming names, he also criticised Germany's step-by-step way of handling developments so far. "Acting forcefully rather than in small, bite-sized pieces and increments, I think, ends up being a better approach," he noted.

Looking back to the G8 summit over the weekend, which included French President Francois Hollande and German Chancellor Angela Merkel, Obama said there is "a consensus across the board" on the crisis.

But his remark masks divisions between Paris and Berlin ahead of an EU summit in Brussels on Wednesday.

Hollande has threatened to block ratification of the Merkel-inspired EU fiscal discipline treaty unless she agrees to a new growth strategy alongside austerity measures.

The German Chancellor has opposed French proposals to increase the EU bail-out fund or "firewall" to a size big enough to cope with an Italian or Spanish meltdown. She has also ruled out French ideas on changing the mandate of the European Central Bank to stimulate growth with "monetary" policy on lower borrowing costs from its current remit of keeping down inflation.

With Obama himself at risk in upcoming US elections if the euro-crisis hits the US economy, he added: "What happens in Greece has an impact here in the United States. Businesses are more hesitant to invest if they see a lot of uncertainty looming across the Atlantic."

He noted that the White House has offered EU leaders "technical assistance [to] work through some of these ideas in terms of how we can stabilise the markets there."

He also highlighted an intrinsic problem in the eurozone set-up.

"Of course, they've got 17 countries that have to agree to every step they take. So I think about my one Congress, then I start thinking about 17 congresses and I start getting a little bit of a headache," he said.

Obama presses EU leaders on growth

A weekend summit of G8 leaders stressed the need for the eurozone to focus on keeping Greece inside the euro. But plans are reportedly being drafted to deal with its potential exit.

Merkel and Hollande want Greece to stay in euro

France's newly elected president and the German Chancellor have said they want Greece to remain in the eurozone. But the IMF says an "orderly exit" is a real option.

US sees ECB chief as 'Mr Euro'

The US Treasury has lobbied the ECB more than any other EU body on the eruo crisis, a new study shows.

Airbnb too 'different' to pay EU tax

US home rental firm said its “model is unique” because most of the money stays in pockets of local people, as France and Germany prepare EU tax crackdown.

EU cautious with German diesel plan

The European Commission welcomed the German carmakers' pledge to update software in diesel cars, but is waiting for details on how emissions will be reduced.

News in Brief

  1. Russian power most feared in Europe
  2. UK unemployment lowest since 1975
  3. Europe facing 'explosive cocktail' in its backyard, report warns
  4. Danish police to investigate misuse of EU fishing rules
  5. German constitutional court questions ECB's €2tn spending
  6. Low support for Norway's labour party ahead of elections
  7. Slovakia's future is with core EU, says PM
  8. Italy relieved as migration drops to lowest level since 2014

Stakeholders' Highlights

  1. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  2. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  3. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  4. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  5. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  6. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  7. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  8. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  9. ACCAAnnounces Belt & Road Research at Shanghai Conference
  10. ECPAFood Waste in the Field Can Double Without Crop Protection. #WithOrWithout #Pesticides
  11. EU2017EEEstonia Allocates €1 Million to Alleviate Migratory Pressure From Libya in Italy
  12. Dialogue PlatformFethullah Gulen's Message on the Anniversary of the Coup Attempt in Turkey