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STOCKHOLM - Secretary of State Hillary Clinton says the United States needs a strong recovery in Europe to help right its own economy.
Given the long-standing importance of cross-Atlantic trade, Clinton says the health of the U.S. economy is tied in part to how Europe manages its debt crisis. "In order to fully recover from the economic downturns of the last years, Europe has to be strong and operating at full speed once again. So we support the need for changes to be made in order to improve Europe's competitiveness," she said.
Following talks with Swedish Prime Minister Fredrik Reinfeldt, Clinton said Washington will do everything it can to support changes among the 17 countries in the eurozone, but the tough decisions themselves are up to Europeans.
Prime Minister Reinfeldt cautioned against calls by some Europeans for stimulus spending to offset unpopular austerity, noting the sound public finances and better growth of many northern European nations after more than 20 years of structural reforms.
"At the same time, we talk sometimes about the troubled situation in part of central and southern Europe as if it was only related to a demand problem. But to me it is also deeply rooted in challenges relating to an ongoing financial crisis in part of Europe, a debt crisis that is of course a consequence of poor public finances, and still also problems with competitiveness," he said.
Unemployment in the eurozone is at 11 percent, the highest level since records were first kept in 1995.
Analysts said the eurozone's stagnant economy could push the unemployment rate even higher in the months to come. The currency union has struggled to boost economic growth while coping with a governmental debt crisis that is now in its third year.
The eurozone is in a sharp political debate over how to boost economic growth even as governments seek to rein in deficit spending. The call by new French President Francois Hollande for policies to foster more job creation collides with austerity measures pushed by German Chancellor Angela Merkel.
At the same time, Spain is struggling to finance a takeover of debt-ridden banks while Greek voters go to the polls this month for parliamentary elections that could help decide whether the country remains in the eurozone or becomes the first to leave it.