Obama news conference signals rising concern about economy

WASHINGTON -- President Obama on Friday prodded European leaders to take further steps to stabilize their financial system while urging Congress to act on his jobs proposals at home, twin moves that signaled rising concern in his administration about the impact of the Euro zone crisis on the tenuous economic recovery.

In a White House news conference, Obama said the situation in Europe is “not simply a debt crisis,” and that nations must pursue strategies for job creation, not just austerity. Ahead of elections in Greece later this month, Obama said the Greek people must “recognize that their hardships will likely be worse” if they abandoned the European single currency.

The president said it was important that Europe inject capital into weak banks and strengthen collaboration on budgets and banking policy, along with developing new strategies to stimulate their respective economies. Obama said he has had positive discussions with EU leaders, including German Chancellor Angela Merkel and new French President Francois Hollande, to that end.

“The decisions required are tough, but Europe has the capacity to make them. And they have America’s support,” Obama told reporters. “Their success is good for us, and the sooner that they act and the more decisive and concrete their actions, the sooner people and markets will regain some confidence, and the cheaper the costs of cleanup will be down the road.”

In light of Europe’s continued struggles, combined with “some softening in Asia,” the president renewed his push for steps he outlined last fall that he said would boost the U.S. economy. Most of them have already been rejected by the Republican-led House.

With his fate in the November vote tied tightly to the state of the economy, Obama sought to shift the blame to Congress. He said the nation would have been on track to add an additional 1 million jobs had his plan been adopted last year.

Republicans have accused Obama of seeking to shift blame for a sputtering economy when his own policies are responsible.

“After 3-1/2 years of job-destroying tax hikes, overzealous regulation and out-of-control spending, the real ‘headwind’ facing job creators in this economy is President Obama’s economic policies,” RNC chairman Reince Priebus said in a statement.

“The truth of the matter is,” Obama responded, “we’ve created 4.3 million jobs over the last 27 months, over 800,000 just this year alone. The private sector is doing fine.”

The Romney campaign quickly pounced.

“The 23 million Americans who are struggling for work are not ‘doing fine.’ Job creators and small businesses are not ‘doing fine.’ The middle class is not ‘doing fine.’ There is no denying that President Obama has been fundamentally hostile to job creators and his policies have prevented our economy from rebounding. America needs a president who understands the economy,” spokesman Ryan Williams said.

Obama, meantime, urged Congress to reconsider elements of the jobs package he proposed in September.

“In light of the headwinds that we’re facing right now, I urge them to reconsider, because there are steps we can take right now to put more people back to work,” he said. “There is going to be plenty of time to debate our respective plans for the future. That’s a debate I’m eager to have. But right now people in this town should be focused on doing everything we can to keep our recovery going and keeping our country strong.”

He also criticized Republican economic policies, echoing former President Clinton’s statement at a joint fundraiser Monday that the GOP was pushing the same kinds of austerity policies that have failed in Europe.

“The recipes that they’re promoting are basically the kinds of policies that would add weakness to the economy,” Obama said.

michael.memoli@latimes.com