The world believes US political leaders will resolve their differences on the budget and avert the catastrophe of a debt default, the head of the European Central Bank said Thursday.
"There's this belief that an agreement will be found," Mario Draghi told a New York gathering, as Washington powerbrokers sought an agreement to raise the debt ceiling by October 17.
"The world still doesn't believe that the US will not find a way out of this," Draghi said.
Draghi said a standoff of several months or weeks could "cause severe damage to the US economy and to the world."
The US government has been partially shut since October 1 due to a fight over budget priorities and President Barack Obama's health care law. In addition, analysts have also described a US debt default as potentially devastating for the economy.
A White House spokesman said Thursday that Obama would consider signing a short-term deal to raise the debt ceiling, depending on the the details of what Republican lawmakers propose.
Obama was scheduled to meet with Republican leaders later Thursday to discuss the GOP proposal to extend the US borrowing authority for six weeks.