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American Money Mess: The View From Europe


I'm Michel Martin, and this is TELL ME MORE from NPR News.

Coming up, in Uganda homosexuality is a crime. But Ugandan activist Frank Mugisha says he cannot live a lie. That's why he has chosen to live as an openly gay man. He joins us later in the program to talk about his struggle to live openly in his country. And he'll also talk about that controversial legislation being considered there that would impose even harsher penalties for being gay. We'll have that conversation a little later.

But first, we want to talk about how economic issues in one country affect people around the world. For example, financial analysts have been pointing to the European debt crisis as one of the reasons markets have been so volatile here in the U.S.

But now, as members of the so-called supercommittee in Congress have only a week left to create a plan to reduce the deficit that both parties can agree on, markets overseas are worried that America can't handle its economic problems.

We wanted to talk about how U.S. economic troubles are being viewed in Europe and what that might mean for Americans. So, from Rome, we are joined by Federico Rampini. He is the U.S. bureau chief of the Italian newspaper La Repubblica. Also joining us here in our studios in Washington, D.C. once again is Marilyn Geewax. She is NPR's senior business editor. Welcome to you both. Thank you for joining us.


FEDERICO RAMPINI: Hi, thank you for having me.

MARTIN: All right, Marilyn, I'll start with you. Much of the recent volatility in the U.S. stock market is being blamed on the European debt crisis. But I wanted to ask you if there are any current problems in Europe that have been fueled by worries over the U.S. economy.

GEEWAX: Yes. The people in Europe are very worried about this debt crisis because it - in the United States as well as in their own countries because here we have this supercommittee that is supposed to be solving our long-term deficit problems and yet we're just days away from their deadline and so far it really hasn't come together.

So, when you look at what's happening in Europe, uncertainty, and you look at what's happening in the United States, uncertainty. You put it together and it's pretty scary. And we had something that made that even worse. Just yesterday, one of the credit rating agencies said that the problems in Europe could spread to U.S. banks. So, everyone is watching. It's important what happens in Europe.

Remember, they are one of our top export trading partners. We sell about - something like a quarter of a trillion dollars worth of stuff to Europeans every year. So, what happens in Europe matters to us. And if we have any of these debt problems sloshing over their problems affecting ours, ours affecting them, it's a global marketplace and it's really pretty unnerving.

MARTIN: Federico, you're - obviously in Italy you've had your own leadership drama involving your Prime Minister Silvio Berlusconi. He's had many, many, many interesting issues related to both his leadership and his certain personal behavior and so forth. But I'd like to ask you how are U.S. economic problems being reported on from there?

RAMPINI: Well, my experience is - and this is my job basically reporting the U.S. news to Italian readers, and I remember that the last time the U.S. economy made the front page news on my newspaper or headline news for the TV media was when Standard and Poor, the rating agency, downgraded the U.S. debt and at the same time more or less there was also the stalemate in Congress between the Obama administration, Democratic Party, and the Republican representatives on the debt ceiling.

But after that, Europe became for us the center of the new stage of the crisis and the U.S. became more and more irrelevant.

MARTIN: Irrelevant?

RAMPINI: Yes, irrelevant because, you know, I covered the G20 Summit in Cannes in France and the only thing that President Obama could do was lecturing us, lecturing the Europeans about the necessity to stimulate growth. But the U.S. has no money to put in that game. The only ones who could eventually help us support us are the Chinese. They have plenty of money. They have $3.2 trillion reserves in their central bank.

They don't seem to be in a hurry to help us. So, the European Union has asked for Chinese contribution to our special fund to salvage, to support states that are at risk of default. But anyway, the Chinese might help us in the end if they want. From the U.S., we get only talk, although it's popular talk. I mean, in that kind of discourse by President Obama on the necessity to support growth is very popular among the progressives in Europe, too. But we don't see the U.S. as a partner that can really help.

MARTIN: If you're just joining us, I'm Michel Martin. And this is TELL ME MORE from NPR News.

We're talking about what they're saying about us overseas. Joining us is Federico Rampini. He's the U.S. bureau chief of La Repubblica. That's an Italian newspaper. Here with us in Washington, D.C. is NPR senior business editor Marilyn Geewax.

Now, Marilyn, you've been reporting on this extensively. Let's step back a bit. And you wrote that at the end of World War II the United States brought the so-called Marshall Plan to Europe. I think, you know, many people will remember that. People - students of history certainly remember that when the U.S. helped rebuild the European economy. It worked pretty well.

GEEWAX: It was really an impressive program, where we went in with billions of dollars and helped rebuild those European economies. And at the end of this four-year program, at the end of World War II, the European economies were far stronger than they were before World War II. Here they had had all this bombing, their bridges were knocked out, their ports were knocked out. And yet because of U.S. help they were able to get back on their feet and became this big trading partner with us.

And remember I said that they're a big market for our goods. So, this was good for everybody. They rebuilt, we rebuilt. But most of all, it really built the U.S. reputation because remember there was communism at that time spreading across a lot of Europe and maybe Europeans could have chosen that business model. But instead they looked to the United States. Our economic strength kept them capitalist, kept them part of the North Atlantic partnership that we have, and everybody came out ahead because of it.

MARTIN: So, you think that the economic relationships led to sort of a broader - kind of a broader cultural effect, an intellectual effect?

GEEWAX: Absolutely, you can say win-win. It made the United States very influential in Europe. And now, we just heard what he said coming out of Italy that we're sort of irrelevant these days because we don't have that kind of economic clout to help shape what happens in Europe. We have to sit there on the sidelines and look at Europeans turning to China for potential help.

MARTIN: Federico, do you feel that is China now experiencing the kind of halo effect that Marilyn talked - I'm calling it that, that's not a term - but that the halo effect from their economic strength in the sense that people are more interested in China now? They're more interested in China culturally and intellectually as a result of those economic ties. Are you seeing that?

RAMPINI: Not really, not that much. I mean, by the way, I was a correspondent in China for five years. So, I know China well. I don't think that China is able to emanate the same kind of cultural hegemony, cultural prestige that the U.S. had during the '50s and the '60s because of their unacceptable political system. I mean, we all know it's an authoritarian regime and it's not very popular here in Europe.

But anyway, just reconnecting to what you said about the Marshall Plan, of course we miss that beautiful time of the Marshall Plan. But more recent memories are definitely more important to Europeans. And the European public opinion remember that this very last crisis was started in the U.S., by the U.S. I mean, it's the subprime mortgage crisis, the origin of everything we are enduring now. So that now there is no American model that can be seen as credible here in Europe.

GEEWAX: And, Michel, can I just mention, too, that this goes back even further than just the subprime thing. Remember, it was exactly 10 years ago, in the fall of 2001, that we had the Enron scandal. So we had accounting problems then and a lot of people lost a lot of money when companies like Enron and WorldCom, and so many others collapsed amid the accounting failures.

And then we had the regulatory failures that led to this subprime crisis. And now, we have the political gridlock where the supercommittee in Washington - Congress can't seem to do anything. It's not just any one thing. It's really a whole cluster of problems that have built up over 10 years that have really diminished the United States as a model for other countries.

MARTIN: And Federico, I'm going to give you the last word here. Particularly interested in how this leadership issue is viewed where you are. I think, in this country, I think people aren't really quite sure what to make of Berlusconi. At least, they weren't quite sure what to make of him. On the one hand, he was seen as this kind of - a sort of an eccentric figure. A lot of people found his personal behavior distasteful, at least, what was reported of it. But he seemed to be a successful businessman and that seemed to evoke, I think, respect on the part of some.

So I'm wondering, from the Italian side, how is this leadership crisis or leadership issue in the U.S. right now, the gridlock that Marilyn talked about - how is that viewed? Is that viewed as, like, kind of an object of ridicule? Is it viewed with puzzlement?

RAMPINI: Well, it's not viewed as an object of ridicule and certainly there is no comparison possible with Mr. Berlusconi. In fact, Barack Obama has been, until very recently, an extremely popular leader here in Europe and especially in Italy, not only among the leftists, the Democratic Italian Party, the progressives. Even among moderates and conservatives, he has been a respected figure.

What the Europeans, and especially the Italians, don't understand exactly is the intricacies of the U.S. political system, this stalemate. They don't seem to grasp - and it's difficult for us journalists to explain - how the most powerful leader in the world can be almost powerless when just one part of the Congress is controlled by the other party.

MARTIN: I think a lot of Americans are puzzled by that, too, quite frankly. Federico Rampini is the U.S. bureau chief of La Repubblica. That's an Italian newspaper. He was kind enough to join us from Rome. Marilyn Geewax is the senior business editor of NPR's national desk. She joined us in our Washington, D.C. studios. I thank you both so much for speaking with us.

GEEWAX: Oh, you're welcome.

RAMPINI: Thank you. Transcript provided by NPR, Copyright NPR.