A new report says the eurozone's economy is falling into a recession. Monday's report came as key European leaders were in Washington for a debt crisis summit with U.S. President Barack Obama.

The Organization for Economic Cooperation and Development said it expects the economy for the 17 nations that use the euro currency will shrink by an annualized rate of one percent in the last three months of the year, and by another four-tenths of one percent in the first quarter of 2012. The OECD, a policy forum for 34 advanced economies, said the European Central Bank needs to intervene decisively to stabilize the continent's debt crisis.

Europe's burgeoning debt crisis was expected to be the key topic as Mr. Obama met at the White House with European Council President Herman Van Rompuy, European Commission President José Manuel Barroso, EU foreign policy chief Catherine Ashton and U.S. Secretary of State Hillary Clinton.

White House spokesman Jay Carney said the European debt crisis has “created a headwind for much of the year” on the sluggish U.S. economy. He said the U.S. government believes it is “critical” for European leaders to “move forcefully” to resolve the debt issue and that the eurozone nations have the financial capacity to deal with it.

As debt worries in Italy, Spain and elsewhere roil international financial markets, the continent's economic leaders — Germany and France — are starting to negotiate a new fiscal agreement that would enforce budget discipline across the eurozone. That is something individual countries have long resisted, as they fear the loss of sovereign control.

The effects of the debt crisis have been widespread. Belgium was forced to pay sharply higher interest rates on Monday, while the Italian Banking Association promoted a patriotic drive to get Italians to buy government bonds to try to keep interest rates from spiraling out of control.

Credit rating agency Moody's warned in a statement Monday that while it believes there will not be widespread defaults in the eurozone, the probability of multiple debt defaults is “no longer negligible.”

Mr. Obama said earlier this month that the situation will continue unless European leaders take decisive action. He said the main issue facing the eurozone is a “problem of political will.”

The U.S. and EU leaders are also expected to discuss Iran's nuclear program, the Middle East peace process, cyber crime and terrorism.