US President Barack Obama, beset by a faltering economic recovery five months before he seeks re-election, said on Friday European leaders must act urgently to resolve the region's financial crisis and stem the threat of recession.
Obama said decisions about how to solve the euro zone crisis were fundamentally in the hands of Europe's leaders and their political commitment will be a "strong step." He was speaking a week after a dismal U.S. jobs report heightened concerns about the impact of Europe's crisis on U.S. growth.
"They understand the seriousness of the situation and the urgent need to act," Obama told a news conference.
"What we can do is to prod, advise, suggest, but ultimately they're going to have to make these decisions," he added, noting that U.S. solutions to the 2008-09 economic and financial crisis should inspire Europe.
Obama spoke as despair deepened in Spain, which is expected to ask for euro zone aid on Saturday to recapitalize its banks. It would be the fourth country to seek assistance since Europe's debt crisis began.
Warning of the "headwinds" from Europe, he said it was time for Washington to take action to strengthen the U.S. economy. While he said private sector employment was doing better, he again pushed Congress to take steps he had recommended last year to create more jobs and hasten growth.
The Democratic president's proposals have centered on government investment in infrastructure and aid to local governments to boost employment for teachers, police and firefighters.
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His efforts at economic stimulus to help the anemic recovery have met staunch opposition from a Republican majority in the House of Representatives that wants to cut government spending, a key component of conservatives' election-year proposals.
By putting the onus on European leaders and Republicans, Obama underscored his lack of options to spur growth before the November 6 election.
Tepid May employment creation that nudged the U.S. jobless rate up to 8.2 percent and other recent downbeat data have fanned concerns that a gradual U.S. recovery might be running out of steam, potentially harming Obama's hopes for re-election in November.
Obama is locked in a tight race for the White House with Republican rival Mitt Romney, who wants to make the election a referendum on the president's handling of the economy as he touts his own credentials as a successful businessman.
Romney picked up on Obama's positive reading on the private sector, calling it a sign that he is "really that out of touch."
"For the president of the United States to stand up and say the private sector is doing fine is going to go down in history...as an extraordinary miscalculation," Romney told a crowd while campaigning in Iowa.
US crisis lessons
As he did in his meeting with G8 leaders last month, Obama said pro-growth policies and recapitalization of weak banks need to be part of the plan in Europe.
"That recipe of short-term investments in growth and jobs with a long-term path of fiscal responsibility is the right approach to take for, I think, not only the United States but also for Europe," he said.
Obama's pro-growth emphasis has found support among European leaders, including the new French president, Francois Hollande, and put him somewhat at odds with German Chancellor Angela Merkel, the flag-bearer for strict fiscal austerity.
Obama expressed confidence that the U.S. banking system was well prepared to weather the stresses of the euro zone crisis.
"The good news is that a lot of the work we did back in 2009 and 2010 have put our financial system on a much more solid footing," Obama said. "Our insistence of increasing capital requirements for banks means that they can absorb some of the shocks that might come from across the Atlantic."