Eurozone crisis creates a headwind for the global economy: US

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Observing that economic performance in Europe is of great importance to the US, the White House has said the eurozone crisis creates a headwind for the global economy, and as such any trouble there poses a challenge to the American economy.

"We believe that economic performance in Europe is of great importance to us here in the United States. The eurozone crisis creates a headwind for the global economy, and we are obviously connected to the global economy, so trouble in the Eurozone presents a challenge to the American economy," the White House Press Secretary Jay Carney told reporters at his daily news conference on Tuesday.

Europe, he said, is an important trading partner, and their financial systems are deeply connected.

"As I've said in the past, European leaders have taken significant steps in implementing a firewall, establishing a firewall, and in various countries implementing reforms that are necessary. And we support those efforts," Carney said.

"More needs to be done, as we have said. And today, as you know, I believe, the G7 ministers and governors reviewed developments in the global economy and financial markets, and the policy response currently under consideration, including progress towards financial and fiscal union in Europe. They agreed to monitor developments closely, ahead of the G20 Summit in Los Cabos," he said.

Welcoming the heightened sense of urgency shown by the European leaders, the US official hoped to witness an accelerated European action over the next several weeks, including in the run-up to the aforementioned G20 leaders meeting in Mexico.

He said that a movement to strengthen the European banking system will be of particular importance in this time period.

The US President Barack Obama and the Treasury Secretary Timothy Geithner, and others have shared the United States' experience with the kinds of challenges that the Europeans have been facing, whether it's the need to implement very strict stress tests on banks, the need to ensure that financial institutions are recapitalised, he noted.

"These are decisions that are sometimes difficult politically, but important for the long-term fiscal health of -- in the case of the decisions we made here, of the United States, and in the case of the decisions being made in Europe, of the countries of the Eurozone and the region," Carney said referring to the recent discussions Obama had with the leaders of G-8 countries at Camp David.

"He has discussed, as you know, and he talked about at Camp David, he has discussed with European leaders the efforts that we have taken here in Washington to restart our economy, to reverse the extreme economic decline that was taking place here in 2008 and 2009, and to put the economy on a path towards economic growth and job creation," he said.

The focus on growth and job creation is very important in the near term, the US official said, adding the European leaders are also committed to that.

"There is much work to be done in Europe, and this administration, the President, Secretary Geithner and others continue to advise and consult their European counterparts as they make some very important decisions," Carney said.

Carney added that European leaders are fully aware of the situation and the measures that will stabilise the situation, stabilise the banking sector, and help them emerge from this crisis.