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11/28/11

At White House Meeting, Obama Expected To Press EU Officials Over Debt Crisis

By Rikard Jozwiak, RFE/RL

BRUSSELS -- The eurozone debt crisis tops the agenda as U.S. President Barack Obama prepares to host a European Union delegation for talks at the White House.

Unemployment in the European Union in 2010, according to Eurostat
Unemployment in the European Union in 2010, according to Eurostat.

Obama's meeting with European Commission President Jose Manuel Barroso and European Council President Herman van Rompuy comes with the White Hose increasingly critical of Brussels over its response to growing fiscal and economic problems.

U.S. Secretary of State Hillary Clinton, meanwhile, is due to meet the EU's foreign policy chief Catherine Ashton to discuss what actions Western governments should take to thwart Iran's suspected ambition to develop a nuclear weapons capability.

No breakthroughs are expected from the White House meeting, which does not include European heads of state who are responsible for making the difficult decisions facing the continent. But Obama, who has been speaking regularly with German Chancellor Angela Merkel and French President Nicolas Sarkozy, is nevertheless expected to press Barroso and van Rompuy hard about the EU's current economic exigencies.

Brussels is struggling to save ailing economies like Greece in order to prevent the contagion from spreading to larger countries like Italy, Spain, and even France. In the past, Obama has said calming the markets would require "some tough decisions" by European leaders, but the U.S. president has yet to spell out what he believes that would entail.

The EU is currently seeking more funding for its bailout vehicle, the 440 billion-euro European Financial Stability Facility (EFSF), which does not have enough funds to bail out economies as large as Italy or Spain. The International Monetary Fund (IMF), in which the United States holds the largest voting bloc, has so far expressed reluctance to invest more money into the EFSF.

In the hours ahead of the U.S.-EU meetings, the Organization for Economic Cooperation and Development (OECD) deemed the eurozone to be in a mild recession and threatening the global economy. In a new report, the OECD said the eurozone debt crisis "represents the key risk to the world economy at present" and warned that a "major negative event" -- an apparent reference to the possibility of one or more countries leaving the eurozone -- risks sending the U.S., Japan, and other advanced economies into recession.

 
OECD calls for urgent action to boost ailing global economy

Iran Question

While the economic issues are a source of some friction between Washington and Brussels, the two sides are likely to concur over Iran.

Washington has already blacklisted 11 entities suspected of aiding Iran's nuclear programs after a report by the International Atomic Energy Agency (IAEA) earlier this month suggested that Tehran is seeking to develop nuclear weapons or the ability to make them.

The EU is also expected to add 191 individuals and entities to its sanction list when European foreign ministers meet in Brussels on December 1. The EU has already blacklisted 35 individuals and 215 entities associated with Iran's nuclear activities. An additional 61 people are subject to asset freezes and an EU travel ban for human rights abuses.

Speaking to RFE/RL, Ashton's spokesman, Michael Mann, said the EU is seeking ways to make this round of sanctions tougher than on previous occasions.

"In the first analysis, what we are going to do is to increase the number names on those lists -- in other words, apply more sanctions but on the same basis as we do already," Mann said. "As a second step, we are looking into ways in which we can take sanctions to a higher level so that is something that is definitely on the table."

One of the possibilities is to follow United Kingdom's recent move to ban all of its financial institutions from doing business with Iran, including with that country's central bank -- a step that Washington has yet to take. France has also suggested a wider import ban on Iranian oil, an idea that Ashton and Clinton are expected to discuss.

"There are various ways in which we can increase the pressure -- [what] the British did involving the [Iranian] Central Bank, for example," Mann said. "I am not saying that is necessarily going to be what the Europeans do, but there are ways of extending the scope of the sanctions to make them put more pressure on the regime whilst at the same time not harming the population."

Clinton and Ashton are also expected to discuss Afghanistan ahead of next week's international conference in the German city of Bonn, as well as the ongoing unrest in Syria. Serbia's bid for EU candidacy, which member states will vote on this week, is also on the agenda.


Copyright (c) 2011 RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org

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