Obama warns of economic 'headwinds,' sees euro surviving

Posted at 07/31/12 1:12 PM

NEW YORK - President Barack Obama warned on Monday the U.S. economy would face continuing "headwinds" over the next few months, with Europe's debt crisis still posing a challenge, but predicted the euro zone and its currency would remain intact.

"I don't think ultimately that the Europeans will let the euro unravel but they are going to have to take some decisive steps," Obama said at a campaign fundraiser in New York.

"I am spending an enormous amount of time trying to work with them, and (Treasury Secretary) Tim Geithner is trying to work with them," he said. "The sooner they take some decisive action, the better off we're going to be."

Obama's re-election bid is threatened by high U.S. unemployment and a stumbling economy, which has felt shockwaves from Europe's debt troubles.

"Right now, the economy is still rough enough for enough people that this is going to be a close election," Obama said. Polls show him in a dead heat with Republican challenger Mitt Romney ahead of the Nov. 6 election.

U.S. economic growth slowed in the second quarter to a 1.5 percent annual rate, the weakest pace in a year, the Commerce Department said on Friday.

"We're going to have some continued headwinds over the next several months," Obama said. "Europe is still a challenge."