The US President says it's important not to "scold" Europe or tell European leaders what to do. Barack Obama says engaging in too much austerity too quickly can make it harder to pay off debts.
It is understood finance ministers from across the Eurozone will hold a telephone conference to discuss a bailout for Spanish banks.
Angela Merkel said Europe was ready to act to ensure stability in the euro zone as Spain's credit rating was cut by three notches.
"We are ready to back the use of euro-area instruments" - Did Merkel just hint at a breakthrough for the banks?