Merkel, Obama voice concern over Greece debt crisis

German Chancellor Angela Merkel sought to quash talk of an imminent Greek default today as the United States voiced fresh concern at the euro zone's inability to master its debt crisis.

Merkel said in radio interview that Europe was doing everything in its power to avoid a Greek default and urged politicians in her own coalition to weigh their words carefully to avoid creating turmoil on financial markets.

Asked by RBB inforadio whether a Greek default would doom the euro, she answered: "We are using all the tools we have to prevent this. We need to avoid all disorderly processes with regards to the euro."

Calling Europe's challenge "historic," Merkel added that everything must be done to keep the euro zone intact "because we would see domino effects very quickly."

President Barack Obama expressed his concern in an interview with Spanish journalists published today. Treasury Secretary Timothy Geithner will take the unprecedented step of attending a meeting of EU finance ministers in Poland on Friday.

It will be Geithner's second trip to Europe in a week after he met his main EU counterparts at a G7 meeting in Marseille – a measure of growing alarm in Washington about the crisis.

Obama was quoted as saying euro zone leaders need to show markets they are taking responsibility for the debt crisis and work out how to tally monetary union with budget policy.

Greece is the immediate concern, but an even bigger problem is what may happen should markets take another run at the larger economies of Spain and Italy, he said.

"It is difficult to coordinate and agree a common path when you have so many countries with different policies and economic situations," Obama said, according to El Mundo newspaper's website.(www.elmundo.es)

"In the end the big countries in Europe, the leaders in Europe must meet and take a decision on how to coordinate monetary integration with more effective co-ordinated fiscal policy," a news agency quoted him as saying.