The White House says US President Barack Obama believes Europe has the resources to deal with its debt crisis and that the Europeans need to act decisively.
White House spokesman Jay Carney said Obama was repeating this message at a US-EU summit in Washington this evening. He said the European crisis continues to cause problems for the US economy.
The president of the European Council Herman van Rompuy and the European Commission President Jose Manuel Barroso are taking part in the summit.
The Americans are deeply concerned that Europe's impending recession will drag them down and lead to a deep worldwide recession.
Moody's warns all euro ratings under threat
US rating agency Moody's has warned that all European Union sovereign ratings are threatened by the current financial crisis.
"The continued rapid escalation of the euro area sovereign and banking credit crisis is threatening the credit standing of all European sovereigns," the agency said in a new special comment.
Moody's said that "in the absence of policy measures that stabilise market conditions over the short term, or those conditions stabilising for any other reason, credit risk will continue to rise."
Greece, Ireland and Portugal all suffered rating downgrades that accelerated unsustainable rises in their borrowing costs over the past two years.
Spain and Italy, which has opened its books to international auditors, have also come under pressure in recent days. France recently announced deep budget cuts in a bid to retain its top Triple-A rating status.
Economists say it is struggling to hold onto the top ranking it shares with the stronger euro zone economies of Germany, the Netherlands, Austria, Finland and Luxembourg.
Moody's noted that political uncertainties in Greece and Italy and the worsening of the economic outlook across the euro area had given rise to "the likelihood of even more negative scenarios.
"The probability of multiple defaults by euro area countries is no longer negligible," the agency warned. "In Moody's view, the longer the liquidity crisis continues, the more rapidly the probability of defaults will continue to rise," it added.
The agency also cautioned that a series of defaults would also "significantly increase" the likelihood of one or more members not simply defaulting, but leaving the euro zone.
"Moody's believes that any multiple-exit scenario - in other words, a fragmentation of the euro - would have negative repercussions for the credit standing of all euro area and EU sovereigns," the agency added.
Germany denies euro zone 'elite bonds' plan
Germany today denied a report it was considering "elite bonds" to pool the debt only of euro zone countries with a top AAA credit rating as a response to its crippling debt crisis.
"There is no plan for 'Triple A bonds' or 'elite bonds' as stated in the article," a finance ministry spokesman said in a statement following a report in the today's Die Welt newspaper.
"We are working intensively on a stability union," the spokesman added, referring to Berlin's drive for EU member countries to sign on to tougher fiscal discipline.
The newspapery had reported that Berlin was looking at a scheme of issuing joint bonds from the six countries with the highest credit rating - Germany, France, Finland, the Netherlands, Luxembourg and Austria.
These bonds would be aimed at erecting a "credible firewall to calm financial markets" and, under strict conditions, could be used to come to the aid of debt-mired major economies such as Italy and Spain, Die Welt said. They would have an interest rate of between 2-2.5% and the revenues generated could be made available to the eurozone bail-out fund, the report said.
But the finance ministry said they wanted to achieve their goal of a stability union "by means of treaty changes in which we suggest that member states' budgets respect firm debt limits."
"This is the way to win back the confidence of the markets and send the right signal to the financial investors of the world that the euro is and remains a stable currency, in which it pays to invest," the statement said. "All that has nothing to do with 'Triple A' or 'Elite Bonds'," added Berlin.
Berlin also remains opposed to a wider scheme formally advanced by the European Commission last week, for "eurobonds" covering the entire euro zone. And Germany is also against allowing the European Central Bank more room for manoeuvre in its controversial programme of buying the bonds of debt-wracked countries.
However, a report yesterday in the "Welt am Sonntag" weekly suggested that treaty changes tightening up fiscal policy in the 17-nation zone could give the ECB more freedom to intervene on the bond markets.
The hope is that the ECB could bring more firepower to bear on the bond markets and bring down the yield, or interest rate, that countries have to pay on their debts. But Berlin is concerned that allowing the ECB to print money for this purpose would lead to inflation.
According to its founding treaty, the ECB's sole function is to keep inflation at a level "close to but below" 2%.
