Last Updated: Fri Oct 07, 2011 11:41 am (KSA) 08:41 am (GMT)

Obama says Europe must act fast on debt, criticizes China for ‘gaming’ global currency markets

President Barack Obama argued that the eurozone crisis made it even more important for Congress to pass his jobs plan. (Photo by Reuters)
President Barack Obama argued that the eurozone crisis made it even more important for Congress to pass his jobs plan. (Photo by Reuters)

U.S. President Barack Obama issued a stark warning on the U.S. economy Thursday, and said Europe must “act fast” to avoid global debt contagion while slamming China for “gaming” global currency markets.

In a White House news conference, Obama also said Republicans must pass his $447 billion dollar jobs bill as insurance against a double-dip recession and warned Pakistan was hedging its bets by maintaining ties with extremists.

Sharpening public frustration over the stagnant U.S. recovery and the jobless crisis dominated the 75-minute session, against a backdrop of Obama’s plunging approval ratings ahead of his 2012 reelection bid.

He warned that a potential European debt meltdown needed to be averted by swift action from the continent's 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 in November.

The president argued that the eurozone crisis made it even more important for Congress to pass his jobs plan, which he said would give a “jolt” to the sickly economy at a time of dangerous external threats.

“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, 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 World Trade Organization.

“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 noted 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 gathering in New York and other U.S. cities were a symptom of the public mood.

“I have seen it on TV and I think it expresses the frustration that the American people feel,” Obama said, arguing that people disliked top bankers and financial firms which caused the, crisis trying to fight regulation.

“You’re still seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on abusive practices that got us into this problem in the first place,” he said.

His comments followed a furor over a plan by Bank of America to introduce a $5 monthly charge on customers who use debit cards after seeing other fees outlawed under Obama’s financial regulation law.

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, 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.

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