* Obama says policies must be adapted if goals not reached
* Must not lose young European generation to unemployment
BERLIN, June 19 The need to balance budgets
should not distract from the ultimate goal of economic policy,
namely improving people's lives, U.S. President Barack Obama
said on Wednesday in what appeared to be a dig at German
Chancellor Angela Merkel's focus on austerity.
Standing alongside Merkel at a news conference in Berlin,
Obama said policies should be changed if they made people worse
off, or led to higher unemployment..
"All of us have to make sure that our budgets are not out of
control. All of us have to undergo structural reforms to adapt
to a new and highly competitive economy," Obama said.
"What's true though is that all of us also have to focus on
growth and we have to make sure that in pursuit of our
longer-term policies ... we don't lose sight of our main goal,
which is to make the lives of our peple better," he added.
Germany has championed the need for structural reforms and
fiscal consolidation in struggling euro zone countries like
Greece and Spain, where youth unemployment has surged to around
It is now adjusting its emphasis on austerity and launching
programmes to combat joblessness in southern Europe. Merkel
herself will host a youth unemployment conference with fellow EU
leaders next month.
But many still blame her for their economic woes.
Protestors in countries like Cyprus, Greece and Portugal
have taken to depicting Merkel with a Hitler moustache or in a
"If for example we start seeing youth unemployment go too
high, then at some point we have got to modulate our approach to
ensure that we don't just lose a generation who may never
recover in terms of their careers," Obama said.
The euro zone economy is struggling to escape a second
consecutive year of recession and high unemployment has provoked
concerns about social unrest, but Obama said he was confident
Europe would pull through successfully.