Arab Today, arab today in euro crisis us gets crash course in eu bodies
Last Updated : GMT 02:46:51
Arab Today, arab today
Arab Today, arab today

In euro crisis, US gets crash course in EU bodies

Arab Today, arab today

Arab Today, arab today In euro crisis, US gets crash course in EU bodies

Washington - AFP

As Europe\'s sovereign debt crisis rattles financial markets and threatens the US economic recovery, political leaders in Washington are struggling with the arcane institutional structures that shape decision-making in the European Union, analysts say. On Monday, President Barack Obama hosts this year\'s EU-US summit, welcoming European Council President Herman Van Rompuy, European Commission President Jose Manuel Barroso and EU foreign policy chief Catherine Ashton. According to European officials, the main focus of the White House meeting will be the global economic situation. Leaders are expected to discuss responses to the eurozone debt crisis, even though the three guests from Brussels are only playing a minor role in Europe\'s efforts to contain the financial turbulence. With a multitude of actors on the national and European level, the EU governing system can appear to outsiders like a mind-boggling maze. \"It\'s kind of like a state, but it\'s kind of not. It\'s kind of an international organization, but it\'s kind of not,\" said Tyson Barker, director of the transatlantic relations program at Bertelsmann Foundation, a think tank. \"We talk about the EU as an economy sometimes, but then we talk about France, Germany and its individual components. It\'s a very hard concept to grasp in the United States.\" The absence of one single economic government for the eurozone and the need for 17 parliaments to ratify major decisions such as the creation of the rescue fund, the European Financial Stability Facility (EFSF), are not always clear in Washington, added Jacob Kirkegaard of the Peterson Institute for International Economics. \"With the exception of a few people at the very top of the Treasury and the Fed there is a very poor understanding, and certainly in the financial markets here in the US, about what are the political and institutional constraints facing policy makers in the euro area right now,\" he said. The lack of speed at moving forward a resolution to the eurozone crisis has led to frustration in the US, with Obama repeatedly urging Europeans to take action and Treasury Secretary Timothy Geithner even joining a meeting of EU finance ministers in Poland in September. The US administration is worried that bad news coming out of Europe could have a negative effect on weak economic recovery here and ultimately damage Obama\'s re-election chances in November 2012. Republicans in Congress have also voiced concern about bailing out profligate Europeans with US taxpayer cash via the International Monetary Fund. Representative Cathy McMorris Rodgers, a party leader, called on Obama last month to veto any new IMF aid to the EU. Meanwhile, Europeans are growing tired of what they say is finger-pointing by a nation that is itself weighed down by $15 trillion of debt. \"It\'s always much easier to give advice to others than to decide for yourself,\" German Finance Minister Wolfgang Schaeuble said in September. \"Both sides are sniping at each other,\" observed Barker, who nevertheless pointed out that there is \"a much broader layer of cooperation that goes unnoticed.\" Many instruments to combat the eurozone crisis such as the plans to leverage the EFSF are products of the US policy debate during the banking crisis in 2008, he said. For Kirkegaard, the conflict \"boils down to a different perception about what are the real ultimate challenges facing Europe.\" While US policy makers want the Europeans to calm markets and contain the economic fallout, the challenges are \"as much institutional and political as they are financial,\" he explained. \"It\'s really about getting governments in various countries to commit to implementing reforms as well as to agree to more fiscal integration.\" The economies on both sides of the Atlantic are closely linked, with the EU and US being each other\'s biggest trade and investment partners. A study by Fitch ratings agency published last week warned that exposure of the US financial sector to European countries and banks was \"sizable.\" The Fed announced a fresh round of stress tests for the largest US banks that also include a possible European market shock. Given the economic \"blowback potential,\" the eurozone crisis should be the number one US foreign policy concern, Barker said. \"But none of our politicians at the top level has been able to communicate the gravity to the American people.\" Barker sees the debates of the Republican presidential hopefuls as a good barometer for public understanding of the crisis. \"The only time it came up all the candidates had the consensus view that the United States should not bail out European banks,\" he said. In the light of the complexity of the problems and the risks for the US economy involved \"this is not a very sophisticated prescription.\"  

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Arab Today, arab today in euro crisis us gets crash course in eu bodies Arab Today, arab today in euro crisis us gets crash course in eu bodies

 



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