U.S. Default Would Have Adverse Effect On Europe's Recovery

The possibility of an American default on its debt is huge news across the continent. Europe is barely emerging from its own debt crisis. Europe's recovery rests on demand for its exports and the U.S. is by far the European Union's largest export market.

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And now let's hear what Europeans are thinking. Here's NPR's Eleanor Beardsley.

UNIDENTIFIED WOMAN: (Speaking foreign language)

ELEANOR BEARDSLEY, BYLINE: The possibility of an American default on its debt is huge news across the continent. This French newscaster warns that American has one more day to find a political solution to the impasse. Europe's recovery depends on demand for its exports and the U.S. is Europe's largest export market, buying $193 billion worth of European goods in the first half of this year.

GUNTRAM WOLFF: Clearly the economic ties and financial ties between the U.S. and Europe are huge and very, very deep.

BEARDSLEY: That's Guntram Wolff, director of the Brussels-based think tank Bruegel. He says a U.S. default on its debt would be a bigger blow to Europe than the collapse of Lehman Brothers in 2008, which sparked the world economic crisis. Losing Treasury bills as a safe asset would have massive implications, says Wolf. The debt ceiling episode has also given Europeans a quick lesson in American partisan politics.

Having mustered the political will among 17 nations to tackle its eurozone debt problems, Europe can't quite believe what's going on in America. Many wonder if the U.S. political system is broken. Guntram Wolff.

WOLFF: What we know from Europe is that when you push things always close to the edge, sometimes you fall over the edge.

BEARDSLEY: Wolff says European politicians should have put more pressure on U.S. lawmakers to solve the crisis. Eleanor Beardsley, NPR News, Paris.

INSKEEP: And we'll continue covering this story throughout the day as attention focuses on the Senate, where leaders say they're optimistic for a deal. This is NPR News.

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