GOP candidates: Europe can save itself

Europe can save Italy on its own, according to the GOP presidential field.

“Europe is able to take care of their own problems,” Mitt Romney, a front-runner for the GOP presidential nomination, said at the Republican debate on Wednesday. “We don’t want to step in and try and bail out their banks and bail out their governments.”

Romney’s remarks were typical of the field’s.

{mosads}Herman Cain, who is at the top of polls with Romney, went so far as to say the U.S. couldn’t do anything to save Italy at this point, even if it wanted to.

“There’s not a lot that the United States can directly do for Italy right now, because they have — they’re really way beyond the point of return that we — we as the United States can save them,” he said.

The debate, sponsored by CNBC, took place after U.S. stocks plummeted on fears that Italy — the world’s eighth largest economy — could be on the brink of default. U.S. businesses are already warning they’re experiencing losses in Europe, and the triple-digit losses on the Dow Jones on Wednesday were a reminder that the European Union crisis is pinching Wall Street and middle-class retirement funds.

Rep. Ron Paul (R-Texas), a staunch opponent of government intervention into the private sector, said the massive debt burdens of European nations had to be liquidated — anything else would simply “prolong the agony.”

Romney and other GOP candidates also said U.S. banks hurt because they hold Italian debt should not get a helping hand from the government.

“There will be some who say here that banks in the U.S. that have Italian debt, that we ought to help those, as well,” said Romney. “My view is no, no, no. We do not need to step in to bail out banks either in Europe or banks here in the U.S. that may have Italian debt.”

The staunch opposition comes as financial markets both foreign and domestic are whipsawing on every piece of news coming from Europe, which has struggled for months to get control of its debt crisis. The problems in the European Union has already led to the ouster of Greek Prime Minister George Papandreou, who resigned the same day as the debate, and appear to be the downfall of Italian Prime Minister Silvio Berlusconi, who said he would step down once Italy adopted an austerity package.

The comments also represent a rare instance of political leaders weighing in on the European crisis which, despite its looming presence on financial markets, has not attracted much public input from U.S. policymakers.

Romney did add a bit of nuance to his position when prodded by moderators, saying that he supported global efforts to help Europe, including via the International Monetary Fund (IMF), of which the U.S. is the greatest contributor. Some GOP lawmakers have opposed U.S. funds donated to the IMF being used to assist in the European bailout.

But most candidates used questions about Europe’s problems to focus on issues back home. Cain immediately pivoted from a Europe question to emphasize the need to grow the domestic economy and establish a sound currency.

And Jon Huntsman used the topic to blast outsized financial institutions that still remain “too big to fail.”

“As long as we have banks that are ‘too big to fail’ in this country, we are going to catch the contagion and it’s going to hurt us,” the former Utah governor said. “We have got to get back to a day and age where we have properly sized banks and financial institutions.”