Obama said he will put the issue at the top of the agenda for the G20 meeting in France in November. "[European leaders] are taking some steps to slow the crisis but not solve the crisis," the president told a group of journalists at the White House. "The bigger problem is what happens in Spain and Italy if the markets keep making a run at those very big countries?" Few would disagree with the president on these sentiments, but it might be hard to take from a country which almost deliberately drove itself to default because of its broken political system.
The president's obvious concern, coupled with fresh fears this week that Greece will drop out of the eurozone, sent European stock markets into a steep fall early this week. German Chancellor Angela Merkel struggled to get ahead of the freefall and reassure the markets that the eurozone will stay intact no matter what, but to no avail. She told German media that a euro exit for Greece is not an option because if Greece left others would quickly follow causing a destabilising domino effect in Europe that could spark economic disaster.
But the kind of decisive action Obama is hoping for seems unlikely to materialise any time soon. What is clearly needed is greater economic union and the establishment of something resembling unified European economic policy. But such changes could take years and would most likely require changing the EU treaties – sparking a painful process of ratification and referendum in an era of Euroscepticism.
Into the abyss has stepped China. Following Obama's comments, Chinese premier Wen Jiabao told the World Economic Forum meeting in Dalian that China would consider 'bailing out' its biggest trading partner, but only if EU countries first "put their own houses in order."
The German chancellor and Greek prime minister George Papandreou are set to hold emergency talks tonight to coordinate a response to the new speculation of a Greek default and eurozone exit. Such meetings are starting to become a weekly exercise. If bold action isn't taken soon, this pattern of worry-calm-worry-calm will surely continue repeating itself.