BADEN-BADEN, Germany - President Barack Obama called on Friday for a rebalancing of global capital flows and said nations had to work together to resolve the financial crisis or risk collective failure.
Obama told reporters that once the U.S. economy had stabilized, it would be necessary to start bringing public deficits down and families would have to boost savings.
U.S. unemployment data released on Friday, showing employers slashed 663,000 jobs in March, was a stark reminder that the United States faced the most severe economic conditions since the Great Depression of the 1930s, he said.
In the short term, my biggest concern is how do I make sure people get back to work, Obama told a joint news conference with German Chancellor Angela Merkel before a NATO summit.
Once we've stabilized the economy, we're going to have to start bringing (down) these huge deficits that our government is running, he said. Families are going to have to be more prudent about spending and save more, he added.
While the United States has run up mammoth trade deficits in recent years, his German hosts have chalked up huge surpluses.
It's not the Germans' fault that they make good products that the U.S. wants to buy, and we want to make sure we're making good products that Germans want to buy, he said.
But if you look overall there is probably going to have to be a rebalancing of who's spending, who's saving and what are the overall trade patterns.
In an echo of earlier U.S. calls for countries with big payments surpluses to make a bigger contribution to stimulating the world economy, Obama said governments would have to work together to tackle the global recession.
If we don't have concerted action on the economy, we will have collective failure, he said, adding that no country could isolate itself from the global market.
World leaders on Thursday agreed to a $1.1 trillion deal in London to confront the economic crisis and said financial rules would be tightened to stop it happening again.
However, Washington failed in its drive to secure any further promises for more government fiscal spending to combat the deepening world recession. Obama said the G20 member states would review the situation in the autumn.
Because we've committed to meeting again in the fall, it allows us to review what we've done and if what we've done is not sufficient and we continue to see a deterioration in the situation then we're going to go back at it and keep on doing so until we get it right, he said.