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Obama: Details needed on Europe bailout plan

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From the left, French President Nicolas Sarkozy, German Chancellor Angela Merkel, U.S President Barack Obama and British Prime Minister David Cameron react during a G20 meeting in Cannes Nov.3, 2011. U.S. (AP Photo/Michel Euler) From the left, French President Nicolas Sarkozy, German Chancellor Angela Merkel, U.S President Barack Obama and British Prime Minister David Cameron react during a G20 meeting in Cannes Nov.3, 2011. U.S. (AP Photo/Michel Euler)

CANNES, France (AP) — With much at stake for the United States, President Barack Obama said Thursday that European leaders must flesh out plans to resolve the region's financial crisis. His prodding at an economic summit in France came as Greek's government appeared in danger of collapse over the prime minister's surprise plan to put the Europe bailout deal to a popular vote.

Speaking alongside French President Nicolas Sarkozy after the two met privately on the sidelines of the Group of 20 summit of leading world economies, Obama said that resolving the European financial crisis is "the most important aspect of our task over the next two days."

But with the crisis posing distinct threats to the struggling U.S. economy, and Obama without many tools to influence the outcome, Obama also said that "we're going to have to flesh out more of the details about how the plan will be fully and decisively implemented."

At a later meeting with German Chancellor Angela Merkel, Obama added, "We are now, having seen some progress, looking forward to working together to figure out how we can implement this in an effective way, to make sure that not only is the eurozone stable but the world financial system is stable as well."

Obama said he and Sarkozy discussed developments in Greece "and how we can work to help resolve that situation." In Athens, demands were mounting for Greek Prime Minister George Papandreou to resign and let a coalition government approve a European bailout plan instead of holding a risky referendum on it. But at an emergency Cabinet meeting Thursday Papandreou ignored calls to resign, even as officials close to him indicated the referendum idea was being scrapped.

After meeting for about an hour with Sarkozy, Obama didn't give any details on what the U.S. might do on its own, or in concert with its European allies, to address the Greek crisis.

"The United States will continue to be a partner with the Europeans to resolve these challenges," Obama said. White House aides said later that the upheaval in Greece only underscored the need to quickly implement a rescue plan regardless of the outcome in Athens.

"The steps that need to be taken are clear, again, irrespective of the political personality or situation at any given moment," said Ben Rhodes, White House deputy national security adviser. "What needs to be done as it relates to Greece, what needs to be done as it relates to stabilizing the Eurozone, was outlined last week and those steps are going to need to be taken going forward, irrespective of, again, where we are at any given moment in a country's politics."

Sarkozy said after meeting with Obama that the leaders were "trying to build the unity of the G-20." He said the top issue is economic stability, "in particular the issue of the Greek crisis"

Sarkozy also said that he and Obama agree that businesses should contribute to resolving the global financial crisis.

Sarkozy said the pair "found a common analysis to make the financial world contribute" to finding a solution. He did not elaborate, but said he welcomed Obama's "understanding on subjects such as a tax on financial activities."

Sarkozy and some others in Europe have been pushing for a small tax on all financial transactions that could be used to help poor nations and reduce debts. The Obama administration is cool to the idea, favoring instead fees on the biggest banks.

As the global economic meeting was getting under way at this seaside resort, turmoil reigned in Athens and rumors circulated about Papandreou's future. The prime minister held an emergency meeting Thursday with his ministers, amid fears that his surprise move in calling for a popular vote on the just-approved bailout package would block Greece from getting vital funds to prevent imminent bankruptcy. Papandreou's move infuriated European leaders and rocked financial markets worldwide, jeopardizing the long-sought deal to resolve Europe's debt crisis.

The situation poses several risks for the U.S. and Obama. If Europe can't contain the crisis in Greece, it could spread across the continent and hit U.S. shores just as the weak U.S. economy has begun to show some positive signs of growth. With unemployment stuck at 9.1 percent, any adverse economic event in Europe could stall the U.S. recovery, causing further pain and hurting Obama's own re-election prospects.

Obama has been a key player at past Group of 20 summits. But his role in these two days of meetings, his fifth G-20, was overshadowed by the situation in Europe even before he arrived in Nice Thursday morning after flying overnight from Washington.

While not exactly a bystander, Obama brought few tools with which to help the Europeans.

White House officials have been consistent in placing the burden for a solution on European leaders, asserting that they have the resources to solve the problem and do it swiftly. White House spokesman Jay Carney said the U.S. could offer unique insights from the 2008 financial crisis on Wall Street and the steps taken to avert disaster.

"The United States, obviously, has a great deal of influence, because of who we are and the role we play in the global economy, and globally in general," he said Wednesday. "I would not discount the significance of the experience that we have in terms of its usefulness to the Europeans."

Beyond the threat of contagion from the crisis, the European emergency could affect the U.S. by altering geopolitical balances. China is considering helping Europe build a $1.4 trillion bailout fund that would protect Italy and Spain in the event of a Greek default.

The U.S. is in no position to offer such financial assistance while participation by China would expand its influence in Europe, potentially at the expense of the U.S.

"European preoccupation with the euro crisis could dash all American hope for trans-Atlantic cooperation in coping with China," Bruce Stokes, a senior economics fellow at the German Marshall Fund, said in written testimony for a U.S. Senate committee hearing.

Copyright 2011 The Associated Press.

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