COMMENTARY | America is going to sit this one out.
That's the message that President Barack Obama is delivering in France this week for annual meeting of the Group of 20 leading economies. The annual pow-wow of world leaders to discuss economic issues will be overwhelmed with discussion about preserving the eurozone and the Greek bailout.
Obama praised the leadership of French President Nicolas Sarkozy and German Chancellor Angela Merkel in separate meetings, but Associated Press reports he resisted urgings for the U.S to help manage the crisis. That was the right answer. The U.S. has enough monetary issues to deal with at the moment. We have no extra money to preserve the European economy.
Socialist government programs and a free-for-all spending by successive Greek governments created the mess Greece finds itself in. They are teetering on the verge of economic default at the state-level, and still cannot manage the will to enact changes needed by the European Central Bank.
Sarkozy and Merkel negotiated a sweetheart deal wherein banks would write off 50 percent of Greece's debt in exchange new austerity measures and added cash to float them through the current crisis. But, the Greek government of Prime Minister George Papandreou was unable to make the tough decision to accept it. On Thursday, CNN Money reported that Papandreou decided to hold a national referendum to decide whether Greece would continue using the euro.
The U.S. pulled Europe out of two world wars last century. We rebuilt their war-torn economies with the Marshall Plan. We financed their national security during the Cold War and we embraced them into NATO when the Berlin Wall fell. The United States did not create the eurozone. We did not finance continuous social program spending in its member countries. We cannot play a role in saving it either.
There is no question that the solvency of the euro is important to the United States. It's in our best interests to preserve the European Union as an easy, reliable trading partner. But with $15 trillion in debt hanging over our heads and a stagnant economy, Obama is right to keep his focus on our domestic issues right now.
This time, the United States needs to give advice and assist where we can from the sidelines. Most importantly, we need to sit back and let Europe fix Europe. They will work out a deal to avoid the collapse of their economy.
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