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WASHINGTON: US President Barack Obama and Greek Prime Minister George Papandreou hold talks Tuesday on economic issues amid concerns that speculators are undermining Greece's efforts to overcome a severe debt crisis.
Papandreou arrived in Washington Monday after visits to France and Germany as part of efforts to drum up international backing for his debt-crippled nation, which has adopted new austerity measures to pull out of its crisis.
In his first public address on arrival, Papandreou called on the United States to crack down on speculators, apparently referring to reports that some US funds have placed big bearish bets against the euro, the sole currency of 16 European Union member states, including Greece.
"Unprincipled speculators are making billions every day by betting on a Greek default," he said.
The single European unit has come under market pressure since it was disclosed that Greece's public debts have mushroomed to 300 billion euros (US$408 billion), well above its annual economic output.
Papandreou warned that the repercussions of any coordinated speculative attacks on the euro would also be detrimental to the United States.
"That is why Europe and America must say 'enough is enough' to those speculators who only place value on immediate returns, with utter disregard for the consequences on the larger economic system - not to mention the human consequences of lost jobs, foreclosed homes, and decimated pensions," he said.
The Greek leader is scheduled to meet with Obama at the Oval Office Tuesday.
The White House said that "economic issues will be an important part of the discussion" between Obama and Papandreou and that they were expected "to discuss their shared commitment to financial reform and economic recovery," among other topics.
Papandreou is unlikely to ask for financial aid from the United States although his hard-pressed Socialist government, which faces a mounting barrage of strikes over its austerity cuts, has suggested it could appeal to the International Monetary Fund for help if rebuffed by the European Union.
"Neither the prime minister nor Greece has asked the United States for anything," Secretary of State Hillary Clinton said after talks with the Greek leader on Monday.
She said Papandreou wanted the United States to lobby for financial reforms in the Group of 20 industrialized and emerging nations.
"What I think Greece is looking for, as the prime minister alluded to, is that the United States, working in the G20, will make some of the changes in regulatory regimes governing some of these financial instruments that have been used to the detriment not only of Greece, but of other countries, including our own," Clinton said.
She cited as an example credit default swaps or CDS, which function like a an insurance contract for bonds.
US and European regulators are scrutinizing such contracts in the wake of the Greek debt crisis amid concerns that excessive speculation could have exacerbated the country's fiscal woes.
Clinton said the United States wanted to work with other nations to reform the "unregulated financial market that globally moves money at the speed of sound, if not light, and leaves in its wake all kinds of consequences that governments have to contend with."
- AFP/sc
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