In phone calls and meetings over the last week, President Obama urged Mrs. Merkel and President Nicolas Sarkozy of France to take coordinated measures — including spending billions in additional funds to bail out Greece and bolster European financial institutions — to prevent Greece’s debt woes from spreading to its neighbors.
The American pressure was on display again Friday and will be this weekend at a gathering of the world’s finance ministers in Washington.
Yet administration officials played down the likelihood of concerted action emerging from these meetings of the International Monetary Fund and the World Bank. At best, they said, the ministers might lay the groundwork for a bolder response in November, when leaders of the Group of 20 industrialized nations meet in Cannes, France.
Recognition is growing that Europe’s debt crisis is now perhaps the largest shadow hanging over the global economy. Although trade with Europe represents only a small share of the American economy, Europe’s problems have repeatedly rattled Wall Street over the last year and a half, eroding confidence and deepening fears of businesses and consumers.
“The biggest single risk to the United States today is that the European situation will spiral out of control,” said Edwin M. Truman, a former Treasury official who is now at the Peterson Institute for International Economics. “Europe is not going to save the U.S. economy, but it could be the straw that breaks it.”
Kenneth Rogoff, a Harvard economist who has written about the history of financial crises, puts Europe’s effect on the United States in blunt political terms. “The downside scenario is awful,” he said, “and if it happens before the U.S. election, it would turn a toss-up election into one in which the president is a huge underdog.
“The administration’s hope is that the Europeans will kick the can down the road far enough that it gets past the election,” said Mr. Rogoff, who has advised Mr. Obama and Republicans.
The administration has trained much of its attention on the figure who may have the greatest ability to influence the outcome in Europe: Mrs. Merkel, the German chancellor. Since he took office, Mr. Obama has met or spoken with Mrs. Merkel 28 times — a pace befitting someone who may have as much influence on his fortunes as his rivals in Washington.
In their most recent call, on Monday, Mr. Obama encouraged Mrs. Merkel to throw more financial firepower at the crisis. The conversation delved into technical details, as well as the risk of financial contagion, said a senior administration official who was not authorized to discuss the call and spoke on condition of anonymity.
Mrs. Merkel faces daunting political obstacles — which Mr. Obama fully recognizes, this official said — in persuading the German public to spend hundreds of billions of euros to bail out Greece and potentially other Mediterranean countries.
While the United States is offering lessons drawn from its own crisis in 2008, the Treasury secretary, Timothy F. Geithner, and other officials are treading carefully to avoid antagonizing Europeans who complain the United States has no business lecturing them. When Mr. Geithner attended a meeting of European finance ministers last week in Wroclaw, Poland, a handful of officials from smaller countries criticized him afterward, but American officials said the meeting was more productive behind closed doors.
The administration’s lobbying effort takes two main forms. One is to press the argument, supported by many economists, that Germany benefits enormously from preserving the euro in its current form rather than abandoning it or standing by as it collapses.
By combining its Deutschmark with the currencies of poorer countries, like Greece, Germany has been able to have a cheaper currency than it would on its own and to export far more than it otherwise might. And exports, which account for a larger share of the German economy than the American economy, have been the main engine of Germany’s recovery.
“There’s a growing narrative that this is a morality play, that this is all about fiscal profligacy in Southern Europe,” said Austan Goolsbee, a former top economic adviser to Mr. Obama, speaking on a panel discussion Thursday at the I.M.F. offices. “But if the Germans are saying, ‘We don’t like the spending by Southern Europe,’ they must also recognize that they’ve been the great beneficiaries.”
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