Obama Urges Europe to Adapt for Jobs at Meeting With Merkel

President Barack Obama said that European leaders facing a scourge of youth unemployment should adapt their policy response as Chancellor Angela Merkel defended her focus on cutting budgets and increasing competitiveness.

Both leaders reiterated a commitment to promoting employment and growth outlined at this week’s Group of Eight summit. With Europe facing 24 percent youth joblessness, Obama said policy makers need to change course in the face of record unemployment.

“If, for example, we start seeing youth unemployment go too high, then at some point we have to modulate our approach to ensure that we don’t just lose a generation that may never recover in terms of their careers,” Obama told reporters at a press conference today in Berlin with Merkel.

In what Obama called a “four-year conversation” on how to resolve the European debt crisis, the U.S. administration has often been at odds with the German-led agenda of austerity to resolve the euro crisis.

“We want to work with you to make sure that every person can enjoy the dignity that comes from work, whether they live in Chicago or Cleveland or Belfast or Berlin, in Athens or Madrid, everybody deserves opportunity,” Obama said in a speech after the press briefing at Berlin’s Brandenburg Gate. “We have to have economies that are working for all people, not just those at the very top.”

Merkel underscored the slow shift away from a focus on budget cuts toward the urgency of unemployment voiced more recently by European leaders.

“The world has changed and Europe isn’t competitive enough,” Merkel said. “Budget consolidation is one part of that, but not the only one, rather structural reform.”

Differing Productivity

While Merkel said Europe needs to boost competitiveness so that products are “bought outside of Europe,” Obama noted imbalances within the 17-member single currency, where member states have “different stages and levels of productivity.”

Policy makers must ensure “that we don’t lose sight of our main goal, which is to make lives of people better,” Obama said.

Beyond their differences, the two leaders lauded the start of talks on a trade agreement between the U.S. and the European Union, a pact that could become the biggest bilateral deal ever. Negotiations start in Washington next month.

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