November 2nd, 2011
02:39 PM ET
(CNN) - When President Obama meets with world leaders at the G-20 later this week, keep this in mind: what happens in Europe doesn't necessarily stay in Europe. It has a rippling effect.
"The biggest headwind the American economy is facing right now is uncertainty about Europe, because it is affecting global markets," Obama told reporters in a news conference last month.
The message is one that is repeated numerous times by the president and others.
"If Europe is weak, if Europe is not growing, as our largest trading partner, that's going to have an impact on our businesses and our ability to create jobs here in the United States," Obama said last week during a meeting in the Oval Office with Czech Prime Minister Petr Necas.
Indeed, the world's most powerful political leaders are gathering this week in Cannes, France in an economic environment that is more uncertain than it has been years. Their mission: to chart a course for the global economy as the outlook for growth remains fraught with risks.
“Our goal is for there to be unanimity of purpose coming out of the G-20…and clearly Europe is a high priority right now,” White House Press Secretary Jay Carney told reporters Wednesday.
"If Europe goes into a deep recession it will hit us many ways: We trade with them, but much more importantly it'll shake confidence, it will hurt our financial sector and take our very, very slow growth and push us into a recession," said Dr. Kenneth Rogoff, the former chief economist for the International Monetary Fund.
Martin Baily, a former economic adviser for President Clinton, agrees with the dire prediction. "If Europe were to have a continuing crisis or a worsening crisis, it would be very hard for the United States to avoid a double-dip recession ourselves," he said.
And a recession would not only hurt the economy. It could also wound the president politically. And he is faced with the task of promoting his latest job creation bill to wary world leaders whose confidence in America’s economic health has been shaken.
"If there's a recession, if the recession is caused by something in Europe, it's caused by something in Asia, it's caused by something here, people are not going to sort through it and sort of go, 'Well geez,' you know what I mean, they tend to blame the people in charge and put the blame [on] presidents in charge," says Democratic strategist James Carville.
But given America's economic slowdown and the political stalemate in Washington, there is only so much the United States can do. And Rogoff, who now is a professor of economics at Harvard University, believes America's influence and leadership within the G-20 has waned.
"Everyone at the G-20 wants their picture with President Obama. He is the central person everyone is looking to, but I don't think the United States can simply dictate the terms of an agreement the way it might have been able to 30 years ago."
Obama’s mission is also made more difficult with that added uncertainty following the surprise call from Greek Prime Minister George Papandreou to put the European rescue plan up for a vote in Greece. Papandreou is seeking public backing from the Greek people for last week's bailout deal, which took months to reach.
But the deal, which includes unpopular austerity measures, may now go down in defeat, a development that would theoretically force Greece to crash out of the euro and send shock waves through the global financial system.
Greek Foreign Minister Stavros Lambridinis told CNN he was confident the Greek people would vote "yes," and that they were "fanatic supporters" of Europe.
Still, the uncertain environment makes the president’s task of helping instill confidence among American and worldwide investors a tall order.
“We have a role here to play because of our experience and knowledge,” Carney also told reporters Wednesday. “And, of course, the fact that we are the largest economy in the world and we can bring to bear insight and experience in a way hat really no other nation can.”
“But there's no question that this is a problem that the Europeans need to solve and that they can solve using the resources they have at their - available to them,” he added.