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Could Europe's debt crisis hurt fundraising for Arab Spring?

U.S. President Barack Obama and First Lady Michelle Obama disembark from Air Force One at Dublin airport in Ireland on May 23, 2011.

UPDATED INTERVIEW

STEVE CHIOTAKIS: As we know now, President Obama's in Ireland, starting a week-long trip to Europe. There are no doubt political and diplomatic reasons for the visit. But the president will also ask for more cash to help democratic uprisings in the Arab world.

More on that now from Marketplace's Stephen Beard who joins us live. Hi Stephen.

STEPHEN BEARD: Hello Steve.

CHIOTAKIS: Now all the problems of course going on with European nations there and debt -- how's the President's financial request going to be received?

BEARD: Well, this is going to be tricky. Many Europeans of course realize they have a vital interest in stabilizing these economies on their doorstep in North Africa, but as you say, Europe does have financial woes of its own. And they are getting worse. We've just had S&P -- the rating agency -- downgrading its outlook on Italian debt to negative. So that's the euro zone's third largest economy drifting towards the danger zone.

CHIOTAKIS: And today, the President is in Ireland, Stephen, which of course has been one of the worst hit economies -- how are they reacting to his visit there?

BEARD: Well, in fact, his trip seems to be lifting the gloom a bit, at least in one small corner of Ireland. He's going to his ancestral home -- the small village of Moneygaul from whence one of his ancestors emigrated to the U.S. in 1850. Today, Henry Healy who lives in Moneygaul and is Obama's eight cousin says the prospect of the president's visit has been a real tonic for the town.

HENRY HEALY: People are coming out of themselves. The doom and gloom is gone around Moneygaul. We've forgotten again about the IMF, and the EU bailout. We have something to look forward to. Something positive.

Sadly the problems remain however -- an economy that has shrunk by almost 10 percent over the past two years. And unemployment at 15 percent.

CHIOTAKIS: Yeah, they need some tonic over there. All right, Marketplace's Stephen Beard in London, Stephen thank you.

BEARD: OK Steve.


ORIGINAL REPORT

JEREMY HOBSON: President Obama has just landed in Ireland for a six-day trip to Europe. In addition to Ireland, he'll visit the U.K., France and Poland. And he's expected to raise a thorny financial issue with the Europeans. He'll ask them to cough up more cash to help the democratic uprisings in the Arab world.

Marketplace's Stephen Beard reports.


STEPHEN BEARD: President Obama is placing the search for peace and freedom in the Middle East at the top of his international agenda. This week, he'll be asking the Europeans to help, with hard cash. He'll call on them to provide more resources to support the pro-democracy movement that has swept across North Africa. Stabilizing and modernizing and creating more employment in this region are for him a high priority.

Simon Tilford is with the Centre for European Reform. He says Europe will receive this message respectfully, but without much enthusiasm.

SIMON TILFORD: Europe is in the middle of a sovereign debt crisis. And unfortunately, that is not a great back drop for a debate about Europe's responsibilities outside of its immediate borders.

And the euro zone debt crisis has just taken another turn for the worse. The focus has shifted beyond the smaller economists of Portugal, Ireland the Greece to the region's third largest economy. The ratings agency S&P has downgraded its outlook on Italian debt from stable to negative.

In London, I'm Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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