WASHINGTON, D.C. (MCT) — From the day he entered the White House, the biggest threat to Barack Obama’s chances of becoming a two-term president has been the battered state of the U.S. economy.
There have been new signs of trouble this spring: slower job growth, higher gasoline prices and fresh fears over the European debt crisis. Yet Obama’s prospects on the economic front may be brighter than they now look.
This past weekend brought encouraging signs that Europe is ready to take stronger action to confront its still-serious debt problems. During the spring meeting of the International Monetary Fund, which concluded Sunday, member nations pledged to nearly double the funds available to the globe’s emergency lender to address future crises.
Top finance officials from the U.S. and other world powers who attended IMF and World Bank meetings in Washington last week agreed that the outlook for Europe has improved. The European Central Bank late last year lowered rates and flooded the continent’s financial system with cheap credit.
Europe’s debt crisis during the last few years has been a major obstacle to the U.S. recovery, frequently jolting financial markets and undermining confidence in the global economy. American businesses send hundreds of billions of dollars in exports to Europe every year and have more than $1 trillion in direct investments in the continent.
The Obama administration has been so concerned about the threat from Europe that it established a sort of war room in the basement of the Treasury building, with dozens of analysts and economists monitoring developments around the clock. The European Central Bank has lent more than $1.3 trillion to banks in the region to help stabilize it.
Yet many experts now see smaller odds that Europe’s debt problems will deliver big shocks to markets or other dramatic developments — at least in the near term.