Obama, Italy's Letta compare notes on budget woes

Reuters

By Roberta Rampton

WASHINGTON, Oct 17 (Reuters) - President Barack Obama andItalian Prime Minister Enrico Letta congratulated each other onThursday for surviving extended budget crises and pledged towork together to advance U.S.-EU trade talks and addresssecurity issues.

The two leaders met at the Oval Office on the day afterCongress agreed to fund the U.S. government until January andaverted a debt default by lifting the nation's debt ceilinguntil February. The U.S. government reopened after a 16-dayshutdown.

Letta said the U.S. deal would help keep global interestrates low, which is vital for his debt-laden nation.

"It is his success, but it is also our success, becauseyesterday's decision was very important for the stability of themarkets in the world," Letta told reporters after meeting withObama.

"I'm very glad for yesterday's result. It's very importantfor our country," he said.

Letta is facing his own budget headaches.

Earlier this month, he won a confidence vote in Parliamentafter a challenge by former Prime Minister Silvio Berlusconi.This week, he unveiled a new budget with tax and spending cuts.

Obama congratulated him for winning the vote of confidenceand for his budget. "I think it's clear that Italy is moving inthe right direction in stabilizing its finances and embarking onreforms that will make it more competitive," Obama said.

Domestic reaction to Letta's budget - which must beapproved by the Italian Parliament by the end of the year - hasbeen sharply negative, and may pose a new threat to thestability of Letta's coalition government.

Obama and Letta said they talked about how to expand theEuropean economy and the importance of an EU-U.S. tradeagreement known as the Transatlantic Trade and InvestmentPartnership, which would be the world's biggest free-trade deal.

Italy will hold the presidency of the European Union in2014, and Letta said, "My dream would be to sign" the trade dealnext year.

"We have to protect against protectionism," he said.

However, the latest round of EU-U.S. talks were scuttledearlier this month because of the U.S. government shutdown,complicating talks.

Obama and Letta agreed to work together to address securityissues in Libya and Syria. Obama praised the "concrete efforts"to destroy Syria's chemical weapons stockpile.

"We both believe it's important to build off that success,or at least that good start, to also talk about the humanitariansuffering that the Syrian people are experiencing," Obama said.

Letta said he spoke about Italy's concerns over migrationfrom "failed states in Africa" and from Syria.

More than 300 African migrants died in a recent shipwreck atLampedusa, off Sicily, part of a surge of migration from NorthAfrica that has been exacerbated by the civil war in Syria,chaos in Libya and instability in Egypt.

"We don't want to have Mediterranean as a dead sea.Mediterranean has to be a sea of life," Letta said.

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