Bush speaks with European leaders for coordination

CHANTILLY, Virginia (Reuters) - President George W. Bush on Tuesday said he had spoken with European leaders to make sure there was coordination in dealing with financial market turmoil that has spread around the world.

Bush, trying to calm fears after steep stock market declines, said while times were tough now the U.S. economy would recover in the long-term.

"I have been in close contact with European leaders. I was on the phone with them this morning to ensure that our actions are closely coordinated," Bush said at an office products company near Washington.

The White House had earlier said Bush spoke with British Prime Minister Gordon Brown, French President Nicolas Sarkozy and Italian Prime Minister Silvio Berlusconi about the financial market turmoil.

Bush again said it would take time for the government to implement the $700 billion financial rescue package signed into law last week that was aimed at easing the credit crisis.

"But I believe the steps we're taking will free up the credit. It took a while to get it frozen, it's going to take a while to get it unstuck. And the Fed took a big step today," he said

The Federal Reserve earlier on Tuesday announced it would create a facility that could buy short-term commercial debt in a move to further calm the markets and provide added liquidity. Commercial paper is widely issued to provide funds for day-to-day operations at many companies.

(Reporting by Jeremy Pelofsky, Writing by Tabassum Zakaria;

Editing by Chizu Nomiyama)