--ECB will step in to mitigate against full-fledged crisis, says St. Louis Federal Reserve president

--Says euro exit won't solve Greece's problems

--Doesn't see elevated chance of U.S. recession next year

(Updates with additional comments and details throughout.)

By Bob Sechler

Of Dow Jones NEWSWIRES

LOUISVILLE, Ky. -(Dow Jones)- St. Louis Federal Reserve President James Bullard said Wednesday he doesn't expect Europe's sovereign-debt crisis to crimp U.S. economic growth significantly unless it precipitates a "financial meltdown" on the Continent, which he doesn't foresee happening.

"I think it has become very clear that the [European Central Bank] is going to back the European banking system," Bullard said, speaking to reporters after an event here with local civic leaders.

Bullard also said he doesn't expect any countries to leave the European Union or ditch the euro, its common currency, although he said such action would be "a traumatizing event" for the EU and the U.S. if it did happen.

"I think there is going to be a lot of pressure [on countries] to stay in" the EU, Bullard said.

As for Greece, the epicenter of the debt-fueled turmoil on the Continent, Bullard said he doesn't think exiting the EU or dropping the euro would help solve its problems.

He identified "governments spending too much" as the root cause of Europe's sovereign-debt crisis in response to a question from the audience.

Regardless, he said Europe's economic troubles shouldn't "impinge" on the U.S. economy too much--barring what he considers the unlikely event of a full-fledged European financial crisis--because "the direct trade effects have only marginal impact" here.

Bullard said in response to an audience member's question that he doesn't consider the chance for a U.S. recession in 2013 to be particularly high or any greater than it was last fall.

"I don't think the risk of recession next year is any higher than it would be at normal times," he said.

On a separate topic, however, Bullard said the U.S. should deal with its looming "fiscal cliff" before the November elections. The federal government will reach its borrowing limit at the end of the year and unless an agreement is reached, large, automatic spending cuts are set to begin and Bush-era tax cuts are set to expire.

"This cloud of uncertainty...is dragging on growth," he told reporters. "There is a lot of upside to getting some kind of deal and getting it now."

Still, he gave short shrift to the prospects of that happening before the elections. He also said he fears that reaching agreement will be problematic even afterward.

"I am worrying that we already know the outcome of the election, and the outcome is the same as today--it's gridlock," he said.

-By Bob Sechler, Dow Jones Newswires; 512-258-1690; bob.sechler@dowjones.com