Europe debt crisis threatens Obama campaign

Help me help you, Angela Merkel.

NEW YORK (CNNMoney) -- There's a political drama playing out right now that could make President Obama's path to re-election much more difficult.

And no, it's not the frantic campaigning in Iowa, New Hampshire and South Carolina. It's the debt crisis gripping Berlin, Paris and Madrid.

Europe's long-smoldering crisis has now reached something of a zenith, compelling the Federal Reserve to jump in and say it will work with other central banks to support the global economy.

Already, the economies of Europe have stopped growing. And many observers worry that the sputtering U.S. economy could be adversely affected by the crisis in Europe.

It's a problem Obama is keenly aware of.

"This is of huge importance to our own economy," Obama said Monday. "If Europe is contracting or if Europe is having difficulties, then it's much more difficult for us to create good jobs here at home."

The U.S. exports hundreds of billions in products to Europe each year -- goods that are less likely to be purchased if the European economy is in tatters. American firms have huge sums of money directly invested in Europe, and U.S. banks have significant loans out to European governments and companies.

It could all go south very quickly. And that will translate, at some point, into votes.

"The slower the U.S. economy is growing, the more difficult it will be for the president to make his case for re-election," said Bill Galston, a senior fellow at the Brookings Institution.

Nathan Gonzales, deputy editor of The Rothenberg Political Report, said that the headlines coming out of Europe could have an impact in 2012 if they contribute to a sense that the domestic economy isn't getting better.

"I think as long as a majority of Americans believe the country is headed off on the wrong track, then the president's re-election is in jeopardy," Gonzales said.

Europe's Debt Crisis

Obama and Treasury Sec. Tim Geithner have traveled to Europe, and conferred at length with German Chancellor Angela Merkel and other officials in an effort to cajole more action out of European governments.

But beyond that, the Obama administration doesn't have much control over the situation.

"I don't think the Europeans particularly want our advice right now," Galston said. "We're sitting down at the table with empty pockets. We have nothing to put on the table."

Even if Obama has limited policy options at his disposal, the eventual Republican nominee is not likely to grant the administration a pass, especially with Obama's record on the economy already poised to dominate the campaign.

"If Europeans don't get their act together, and the U.S. growth rate is cut in half, we're going to have a different kind of election," Galston said.