The intensification of the European debt crisis could not be occurring at a worse time for President Obama. There is now every prospect that a wave of European sovereign debt defaults will occur within the next six to twelve months, or just as the 2012 U.S. presidential election gets into full swing.
When those European defaults do occur, they will reverberate throughout the global economy in much the same way as the U.S. sub-prime crisis did in 2008. And against the backdrop of the slowing U.S. economy, already much in evidence, this will almost certainly keep unemployment at close to its post-war high on Election Day. Much to Obama’s chagrin, this is bound to make unemployment the central issue in the 2012 elections.