U.S. Leaders Monitoring Greek Financial Crisis
Washington - President Obama has spoken with German Chancellor Angela Merkel about Greece's unfolding economic crisis and the importance of action by Greek officials to begin preparing the necessary measures to respond, the White House says.
"This is something that is of great concern to the president," White House deputy press secretary Bill Burton told reporters April 28. "We're monitoring it very closely. And officials from Treasury [Department] and other appropriate agencies are in close contact ... about that issue."
The president spoke with Merkel by telephone April 28, and according to the White House, "they discussed the importance of resolute action by Greece and timely support from the [International Monetary Fund] and Europe."
Earlier, the Greek government formally requested an international funding package to pull the country out of a debt crisis. Prime Minister George Papandreou announced on Greek television April 23 the activation of up to 45 billion euros, or $60 billion, in loans expected from the European Union and the International Monetary Fund (IMF). Officials from the European Commission, European Central Bank and IMF have been holding talks in Athens to complete terms of the anticipated aid package.
The Greek government has already begun readying severe austerity measures to secure the multibillion euro assistance. And the IMF has pledged to increase the 45 billion euro aid package for Greece to nearly 120 billion euros over a three-year period to thwart the financial crisis. Customarily, the austerity measures have to be in place as the aid package takes effect.
Papandreou was in Washington March 9 for consultations with key U.S. leaders on the financial crisis that has gripped his country and pushed the government's budget deficit to 12.7 percent of Greece's annual gross domestic product, which is the sum of the nation's goods and services. Papandreou is attempting to reduce the deficit to about 8 percent of GDP, and he blames much of the nation's economic woes on widespread financial speculation that is largely unregulated in markets across the globe, and is the subject of intense scrutiny by the Group of 20 advanced and emerging economies.
Previously, the Standard & Poor's credit rating services agency announced a downgrade in the credit ratings of Greece, Spain and Portugal.
At a joint press conference with Papandreou March 9, Secretary of State Hillary Rodham Clinton said ( http://www.america.gov/st/texttrans-english/2010/March/20100308172802eaifas0.6518518.html ) that "among our most pressing, shared challenges today is the global economic crisis that has thrown people out of work, shuttered businesses, [and] drained government coffers in both the United States and Greece. I want to commend the prime minister for his leadership in tackling the challenge that he confronted upon taking office."
"We support Greece and the tough economic measures it is taking to address this issue," Clinton added. Papandreou is implementing measures designed to reduce government spending and repair the nation's tax system.
Clinton said that neither the prime minister nor the Greek government has asked the United States for financial assistance. Papandreou was in Washington seeking U.S. support in the Group of 20 (G20) industrialized and developing economies to push for changes in regulatory regimes governing some of these highly speculative financial instruments that have been used "to the detriment not only of Greece, but of other nations, including our own," Clinton said.
The U.S. Senate is considering legislation that would institute new financial industry reforms similar to what has been discussed by the G20 nations in two summits in 2009 in London ( http://www.america.gov/st/peacesec-english/2009/April/20090402151644dmslahrellek0.8364832.html ) and Pittsburgh ( http://www.america.gov/st/business-english/2009/September/20090927125733dmslahrellek0.1804882.html ). The president has said it is essential for the United States to strengthen financial rules to lessen chances of another economic recession.
While in Washington, Papandreou, who assumed office in October 2009, also held meetings with Treasury Secretary Timothy Geithner, but he told reporters that he did not ask for financial assistance. White House press secretary Robert Gibbs said that the administration believes the European Union is in the best position for helping Greece manage its economic situation.
