FACTBOX: Some key issues in U.S.-European relations

WASHINGTON (Reuters) - U.S. President Barack Obama makes his second foray into European diplomacy next week facing pressure to show his consensus-building approach to foreign policy can produce results where his predecessor's go-it-alone style failed.

After initial stops in Saudi Arabia and Egypt to deliver a major address to the Islamic world, Obama will travel to Europe where he will hold separate face-to-face meetings with German Chancellor Angela Merkel and French President Nicolas Sarkozy.

Following are some of the key issues in U.S.-European relations:

* FINANCIAL CRISIS/ECONOMY - Since taking office in January, Obama has signed a two-year, $787 billion economic stimulus bill to lift the U.S. economy out of recession. The U.S. government has intervened to prop up weakened major banks. Treasury Secretary Timothy Geithner has unveiled a plan to buy bad debt clogging the books of troubled banks.

Germany has passed two economic stimulus packages, one last year valued at about $30 billion and a second this year worth about $65 billion. European Union countries have authorized about $510 billion worth of economic stimulus spending, but were reluctant to go further at the Group of 20 summit in London in April.

Europe has been slow to deal with bad bank assets. A recent IMF report showed more than half the bad assets in the global banking system belonged to European banks. U.S. banks have been more aggressive in writing down bad debt than European banks -- 70 percent versus 14 percent. Recapitalizing banks to the levels of the 1990s would mean an injection of $275 billion for U.S. banks, versus $500 billion for European banks.

* RUSSIA - The Obama administration is seeking a new start with Russia after the tensions with the Bush administration. Obama and Russian President Dmitry Medvedev agreed in their April meeting to launch new talks aimed at reducing their number of nuclear warheads.

Underlying U.S.-Russian frictions are issues of NATO expansion to countries like Georgia and Ukraine, and U.S. plans to base a missile defense system in Poland and the Czech Republic to defend against attacks from countries like Iran.

Moscow views the missile system as a potential threat despite U.S. denials. It fought a war in Georgia last year in support of pro-Russian separatists and cut off gas supplies to Europe during the winter because of a dispute with Ukraine.

Obama plans to meet Medvedev for talks on nuclear arms and other issues in July and his hand would be strengthened if he could present a unified NATO position toward Russia.

* AFGHANISTAN/PAKISTAN - Obama unveiled a new strategy for the conflict in Afghanistan that calls for a broader approach aimed at disrupting, dismantling and defeating al Qaeda and the Taliban in Afghanistan and Pakistan.

He ordered 17,500 additional combat troops to join the 38,000 already there, plus another 4,000 to help train Afghan soldiers. He also planned to double the number of civilians in Afghanistan to 900 to help rebuild the country's infrastructure.

Obama got words of support for his policy from NATO allies, but no offers of long-term troop deployments. The Europeans pledged 5,000 troops as reinforcements for the Afghan elections later this year plus paramilitary police trainers.

* IRAN - Major European powers have negotiated with Iran for years with little success in an effort to get it to end its nuclear enrichment program, which Tehran says is for peaceful energy production but the West fears is aimed at developing nuclear arms.

Obama came into office saying he was willing for the United States to hold discussions with Iran over its nuclear program. The United States indicated it is willing to impose sanctions on Tehran if it continues nuclear enrichment, but other members of the P5 plus 1 group negotiating with Iran have been reluctant to impose greater punitive measures.

The P5 plus 1 consists of the five permanent members of the U.N. Security Council plus Germany. Russia and China, in particular, have opposed tougher sanctions, and Germany has been reluctant to impose sanctions outside the U.N. Security Council process.

German exports to Iran were nearly $5 billion in 2008, much of it machinery and vehicles. Iran's nuclear program is heavily dependent upon German products and services, according to the Carnegie Endowment for International Peace. French exports to Iran were more than $2 billion in 2008.