U.S. officials say Europe’s woes are already weighing on the U.S. economy, which grew at a tepid 2.2 percent in the first quarter of 2012.
Rather than a hit to exports, the real nightmare scenario for U.S. businesses, banks and policymakers alike would be a chaotic unraveling of the euro zone’s financial system on the scale of the crash that followed the failure of U.S. investment bank Lehman Brothers in 2008.
Then, banks in the United States and beyond were pushed to the verge of collapse by a seizing up of credit, strangling the global economy and more than halving the value of U.S. and global stock markets. The psychological impact demolished consumer confidence as well as the economic track record of the Republican administration, helping hand an historic election victory to Obama.
For the sake of the U.S. economy and the election that no doubt hangs on it, the White House has no wish for history to repeat itself.
Photo credit: Germany’s Chancellor Angela Merkel and President Barack Obama speak while awaiting the start of a meeting on the second day of the G20 Summit in Cannes, November 4, 2011. REUTERS/Dylan Martinez