Greece Seeks U.S. Action, But Not Handout
Ahead of a meeting with U.S. President Barack Obama on Tuesday, Greek Prime Minister George Papandreou is stressing that his country's financial woes are a problem the United States cannot afford to ignore.
Papandreou also says he is not looking for a handout from Washington.
Instead, Greek officials say they want to see the United States impose stricter regulations on hedge funds and currency traders that Athens believes aggravated their crisis.
In his meetings this week with Obama, Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy Geithner, Papandreou also is seeking to outline for the U.S. administration the steps that Greece is taking to stem its financial bleeding and reform its economy.
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Austerity measures announced so far by Papandreou's government are not going down well with the country's work force.
Government workers said Tuesday they will extend a garbage strike that has led to piles of rubbish in the streets of Athens.
The strike is part of the protests by unions that oppose a euro4.8 billion ($6.5 billion) austerity package that will hike consumer taxes and slash pay for public sector workers by up to 8 percent.
Papandreou's trip to Washington along with his finance minister, George Papaconstantinou, comes as Greece tries to climb out of a steep economic hole that widened after Papandreou's Socialist party came to power in October and revealed that its budget deficit was far worse than the previous government had disclosed.
Greece revised its budget deficit to 12.7 percent of gross domestic product for 2009 from below 4 percent earlier that year.
The trip is part of a four-nation tour aimed at boosting Greece's financial credibility and winning support for more favorable interest rates for loans. Papandreou says the solution lies with support from European Union countries. He was in the United States as the Obama administration and the U.S. Congress are considering major changes in the U.S. financial system designed to prevent future activities such as those that caused a major recession in Obama's first year in office.
Papaconstantinou told The Associated Press that he and his prime minister also were trying to illustrate for the U.S. administration how hedge funds have made the crisis worse by betting on Greece defaulting on its loans, then seeking to make that result more likely.
U.S. Banks Helped Fuel Greek Debt Crisis
On Monday, Papandreou compared currency speculators to arsonists.
"It is common sense, enforced by insurance regulators, that a person is not allowed to buy fire insurance on his neighbor's house, and then burn it down to collect on that insurance," Papandreou said, comparing arsonists to speculators. "If Europe and America jointly step in to shore up global financial regulation, and to finally ensure enforcement of regulations, we can curtail such activities."
Papaconstantinou warned that leading economic powers have not yet implemented the changes needed to avoid another financial crisis.
"The real question that we should be asking ourselves on both sides of the ocean is, `Have we learned the lessons of that financial crisis?"' he said. "I think the honest answer is that despite some political will to do so, we haven't actually taken all the necessary measures."
That theme is likely to come up in Papandreou's White House meeting.
Papandreou emphasized Monday that financial instability in Greece and Europe pose a threat to the United States.
"For America, a weak euro means a rising dollar. That, in turn, means a rising U.S. trade deficit," he said. "If the EU, still America's biggest trading partner, should falter, the consequences here would be palpable."