Will European debt crisis sandbag U.S. economy?

European Commission President José Manuel Barroso (R) speaks following a summit with US President Barack Obama Nov. 28, 2011 in the Roosevelt Room of the White House in Washington, D.C.

Steve Chiotakis: With leaders in Europe trying to find their way out of an economic crisis, there continues to be concern about how a European recession could affect us here in the United States.

From Washington, Marketplace's David Gura reports.


David Gura: The White House says European companies invested nearly $1.5 trillion in the U.S. last year. And trade between Europe and the U.S. tops $3.5 billion a day.

Alexei Monsarrat: I think we're enormously vulnerable to what's happening in Europe.

Alexei Monsarrat is with The Atlantic Council.

Monsarrat: A serious drop in demand from Europe. That's going to have an impact on the U.S. economy. There's no question about it.

Big U.S. banks do a lot of business in Europe, and big European banks are an important part of the banking system here.

Megan Greene is with Roubini Global Economics.

Megan Greene: If there's a liquidity crunch and a credit crunch throughout Europe, that could easily spread to the rest of the world.

And right now, Monsarrat says, our hands are tied.

Monsarrat: There's probably ways to mute some of the impacts, but there is just a basic trade and investment relationship there that means that, when Europe runs down, so do we.

In Washington, I'm David Gura for Marketplace.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau.

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