US President Barack Obama made a speech today asking European Leaders to work to solve their debt crisis before it precipitates a new world wide recession. The speech came in the wake of last week’s jobs report that showed the US economy was not on the clear path toward recovery that had been hoped.
The President spoke of “the urgent need to act” weighing on European leaders as the continent continues to wane in response to renewed crisis in Spain and other serious problems coming down the line. He also spoke of the importance of European recovery to the United States and the importance of legislation to recovery at home.
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The major legislation addressed by Obama was the jobs plan he offered last September. The President urged members of Congress to approve large portions of the act in order to return America to employment and prosperity. The President said that legislation was key in putting Americans back in jobs.
In response to the poor jobs report of last week Obama offered explanation based on the lack of public sector hiring that had taken place in recent weeks. Mr. Obama said that the private sector had added 4.3 million jobs but the lack of activity in the public sector had dampened the total impact.
There are clear effects from the US economy that the European crisis is taking its toll and the only way to escape the coming problems is a solution to Europe’s woes. The economy is suffering based not on its intrinsic performance but on exogenous effects from international crisis.
The election campaign is now in full swing as Mitt Romney has received enough delegates to be nominated at the Republican National Convention in Tampa, FL in August. The poor economic indicators are hurting Obama’s reelection hopes and creating a more difficult path to a victory in November.
Recent polls have shown that the two candidates are about evenly split among Americans meaning the race will be a close one. The performance of the economy between now and November will have a huge effect on the decision made by ordinary Americans.
If the economy does not pick up and people do not begin returning to work Obama will face trouble. In order to ensure recovery Europe needs to show signs of solid recovery or at least structural change. This will be a running theme throughout the reelection campaign of Mr. Obama, though the Republican campaign is likely to downplay the effect.