Barack Obama Promises That Events In Greece And Puerto Rico Will Not Cause A Global Financial Crisis

President Barack Obama downplayed the threat that Greece's debt crisis poses to the American economy, saying that the Hellenic Republic's problems would create more woes for the European continent than the United States.

"In layman's terms, for the American people, this is not something we believe will have a major shock to the system, but obviously it's very painful for the Greek people, and it can have a significant effect on growth rates in Europe," which can "have a dampening effect" on global economy, the president told reporters during a joint press conference with Brazilian President Dilma Rousseff.

But should there be a so-called Grexit -- or Greek exit from the European financial community -- Obama added that “it is important for us that we plan for any contingency, that we work with the ECB and other international institutions to ensure that some of the bumps that occur in the financial markets are smoothed out.”

Merkel and Hollande, who have repeatedly said they want to hold the euro together, gave the Greek premier no leeway after he broke off negotiations over future bailout aid. Hollande suggested the referendum would determine whether Greece could stay in the 19-nation euro area, while Merkel said Europe's credibility was at stake with its response.

"If the euro fails, Europe will fail," Merkel said in a speech in Berlin. "That's why we have to fight for these principles. We could maybe set them aside in the short term. We could maybe say we'll just give in. But I say: in the medium and long term, we will suffer damage that way."

“A Greek exit has become our base case, which means the risk premia for holding European assets are going to increase,” Hans Redeker, global head of currency strategy at Morgan Stanley, told Bloomberg News. “The European Central Bank will have to act against that.”

Greece requested a third bailout from the eurozone Tuesday in a last-ditch effort to secure a debt deal before its financial-crisis-era bailout expires and it defaults on a loan from the International Monetary Fund, one of its three international creditors.

The two-year deal, if accepted, would allow Athens a new bailout from the eurozone’s European Stability Mechanism, its $560 billion rescue fund.

As European finance ministers met Tuesday to discuss the proposal, thousands of Greeks took to the streets of Athens, many of them in support of accepting new bailout terms.