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US is closely monitoring the situation in Europe

ABOARD AIR FORCE ONE (Reuters) – On Thursday the White House said that it continued to believe that the European institutions could cope with the budget crisis and said that European monitor the situation closely.

“It is certain that some of the turmoil here in the U.S. is due to economic difficulties from Europe,” said Jay Carney the press officer of the White House.

The White House also said that the U.S. Treasury Secretary Timothy Geithner was in regular contact with his European counterparts to discuss the evolution of the fiscal crisis.

Barack Obama himself has talked in recent days with leaders German, French, Spanish, British and Italian about it.

On Thursday European and U.S. stock markets rallied, but market sentiment remains very fragile, worrying investors including the exposure of European banks to the debts of countries in trouble and fearing a similar episode in the fall of Lehman Brothers in September 2008.

Obama pledged to bring to the table new proposals “week after week” to revive economic growth and employment. He added that Congress must complete its plan to reduce the deficit, but all focus on further reductions in public spending.

“This is not simply to further reduce spending this year or next year, because such reductions would weaken the economy further,” he said.

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