U.S. and Europe must work together to spur growth
A giant symbol of the European Union's currency, the euro, stands outside the headquarters of the European Central Bank in the central German city of Frankfurt am Main.
Jeremy Hobson: European Union officials said today that economic growth in Europe will come to a near standstill this year because of the debt crisis. And it's fair to say the debt problems across the Atlantic aren't helping our economic growth much either.
For more on the impact, let's bring in Marketplace's David Gura, who is live this morning from Washington. Good morning.
David Gura: Morning, Jeremy.
Hobson: Well David, how is all the market turmoil from Europe affecting business so far here in the U.S.?
Gura: Well, the bottom line is it's causing even more economic uncertainty, on top of all the economic uncertainty we've seen so far. You know, we've had a few banks -- JP Morgan's among them -- telling investors they shouldn't expect a great third quarter.
We've seen some companies drop bids for other companies -- Avis did that yesterday, saying it's no longer interested in buying Dollar Thrifty. And some companies have delayed IPOs -- the FT is reports Facebook will put off its IPO 'til next year, at least. And of course, there are concerns and questions about how this will affect our financial system.
Now, over the last few weeks, we've heard from Treasury Secretary Tim Geithner, we've heard from the Fed chairman. They've both said they're talking to their counterparts in Europe, and they're monitoring what exposure U.S. banks have to European debt.
Hobson: And of course, Treasury Secretary Geithner will be in Europe tomorrow meeting with finance ministers. What kind of influence is he going to have there?
Gura: Economists I talked to said Tim Geithner actually plays a key role in all of this. He's a guy who has been through a financial crisis, of course. He knows what went wrong, what went right -- and that experience is pretty important.
I called up Alexei Monsarrat. He's with the Atlantic Council. And he told me the U.S. can do two things.
Alexei Monsarrat: One is to be supportive publicly of what it is Europe is doing. And the second is to work closely with them strategically so that both the U.S. and Europe are pulling in the same direction.
Monsarrat told me that the U.S. and Europe have done a pretty good job sharing information so far, but he thinks that there needs to be a tougher strategic discussion. They need to push each other a bit more -- figure out where things are headed, and where they should be headed, Jeremy.
Hobson: Marketplace's David Gura in Washington. David, thanks.
Gura: Thank you.