Europe, China must act on economy, Obama says

AFP, Washington

Sat, Oct 08, 2011 - Page 10

Facing a tough re-election fight, US President Barack Obama on Thursday warned Europe’s crisis could severely impact the fragile US recovery if Republicans balk at passing his US$447 billion job creation plan.

In a markedly downbeat diagnosis of the US economy a year before he asks voters for a second term, Obama also hit out at China for “gaming” global currency and trading markets in remarks likely to infuriate Beijing.

Deepening public frustration over the stagnant US recovery and the jobs crisis dominated Obama’s White House press conference, as he battles dipping approval ratings, which hit 42 percent in one recent poll.

He warned that a potential European debt meltdown needed to be averted with swift action from eurozone leaders.

“They have got to act fast,” Obama said, calling for a “concrete plan of action” to be in place by the time of the G20 summit in France next month.

The president argued Europe’s crisis made it even more important for Congress to pass his jobs plan, which he said would give a “jolt” to the sickly economy.

“The problems Europe is having today could have a very real effect on our economy at a time when it’s already fragile,” Obama said.

“This jobs bill will help guard against another downturn if the situation in Europe gets any worse,” Obama said in his first formal news conference since unveiling the plan last month.

Earlier, US Vice President Joe Biden warned of the risk of “international contagion” if Europe did not forestall its crisis soon, but acknowledged the continent’s leaders faced “wrenching” political choices.

Obama also waded into the debate about China’s currency policies, though stopped short of endorsing a Senate bill to punish Beijing, citing concern that it could conflict with US obligations to the WTO.

“China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States,” Obama said.

“And currency manipulation is one example of it, or at least intervening in the currency markets in ways that have led their currency to be valued lower than the market would normally dictate,” Obama said.

The president said that Beijing had allowed the yuan to rise in value over the last year, but said “it is not enough.”

Surveying current dire economic conditions clouding his hopes of winning a second term next year, Obama said anti-Wall Street protests in New York and other US cities were a symptom of the public mood.

The president, who has adopted a populist stance and called out senior Republican foes by name after the public lost confidence in his economic management, again implored lawmakers to pass his jobs bill.

“I want an explanation as to why we shouldn’t be doing it — each component part,” he said of a bill that finances teachers, gives tax cuts to small businesses and the middle class and offers tax breaks for job hunting veterans. “I would love nothing more than to see Congress act so aggressively that I can’t campaign against them as a do-nothing Congress.”

Obama also said that he was “comfortable” with a plan by Senate Democrats to impose a 5.6 percent surcharge on millionaires to pay for his jobs package.