Obama says Italy moving in right direction on economy; Letta says budget deal good for markets

WASHINGTON – His latest budget crisis resolved, at least temporarily, President Barack Obama received encouragement Thursday from a world leader who, like the president, is experienced at handling economic woes.

In return, Obama offered his vote of confidence in the leadership of Italy’s Enrico Letta, saying the prime minister was moving his economically troubled European country “in the right direction.”

The two leaders met just hours after the U.S. government fully reopened following a 16-day, partial shutdown prompted by the lack of agreement between Obama and Congress on how much money the government should spend.

Some Republican lawmakers had also threatened to not give the government the authority to continue borrowing money to pay its bills, which likely would have spooked world markets by sending the U.S. into an unprecedented economic default.

A budget agreement passed late Wednesday by Congress and quickly signed by Obama temporarily reopened the government and put off until February a decision on the government’s borrowing powers.

Letta, who became prime minister earlier this year, is trying to turn around an economy that is weighed down by a heavy debt load and high unemployment, especially among youth. He said the budget deal will help all economies by keeping world markets stable.

“I congratulated President Obama for yesterday’s success,” Letta said during a portion of the Oval Office meeting the White House opened to the media. “We need stability because we have such a big debt, so we need to have low interest rates.”

Letta said Italy has the lowest interest rates it has had in about two years, which he said was an important demonstration of the fact that “we are in the right path. And we have to continue that.”

Obama concurred. “I think it’s clear that Italy is moving in the right direction in stabilizing its finances and embarking on reforms that will make it more competitive,” he said.

Obama said Letta invited him to visit Italy and “eat some very good food.” But Obama suggested that a return visit to Tuscany, where Letta is from and where Obama said he travelled before becoming president, would be unlikely before he leaves office.

Afterward, Obama and Letta retired to the president’s private dining room for a working lunch. When it was time for Letta to head out, Obama took the unusual step of walking Letta out of the West Wing. They spent a few minutes chatting at the door before the prime minister got into his waiting car.


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