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Obama urges swifter action on Greece

AFP/DPA/The Local · 29 Apr 2010, 07:55

Published: 29 Apr 2010 07:55 GMT+02:00

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In a clear indication of growing US concern, Obama broke away from events in Ohio, where he has been addressing economic hardships facing Americans, to call Merkel about a crisis that threatens to spread across the eurozone.

"President Obama and German Chancellor Angela Merkel spoke today by telephone, one in an ongoing series of consultations between close allies on global issues," the White House said in a statement.

"They discussed the importance of resolute action by Greece and timely support from the International Monetary Fund (IMF) and Europe to address Greece's economic difficulties."

Merkel's government has for weeks shown reluctance to give Greece financial aid because of fierce domestic opposition.

But as the euro was pummeled in recent days and Greek debt was downgraded to junk status, fears that the crisis was spreading appeared to have forced Merkel to act.

The news came as concerns also grew about the ballooning size of the bailout package experts forecast Greece would actually need. Economy Minister Rainer Brüderle suggested Greece’s government would need €135 billion by 2012, with Germany having to kick in €25 billion to €30 billion of that.

His remarks followed suggestions by IMF chief Dominique Strauss-Kahn that Greece would need €120 billion.

However, Finance Minister Wolfgang Schäuble quickly slapped down speculation about a total.

“No, no one knows (what the total will be),” Schäuble told broadcaster ARD. “We hope that it will cost nothing at all,” he added, pointing out that the bail-out would come in the form of loans.

On the margins of crisis meetings with the IMF and the European Central Bank, Merkel on Wednesday said that Greek rescue talks must be "accelerated."

Her comments came as the euro hit fresh one-year lows and Spain became the latest eurozone member to suffer a downgrade of its credit rating.

Story continues below…

Greece meanwhile acted to stop speculators operating on the Athens stock exchange as the interest rate it has to pay to borrow money hit 11.1 percent, trailing only Pakistan and Venezuela as the world's highest interest payers.

US firms are not seen as hugely exposed to Greece's debt woes, but instability in the eurozone has rocked US markets, causing the blue-chip Dow to lose over 200 points on Tuesday.

The European Union is also the biggest trading partner for the United States.

According to the White House, "the president and the chancellor also discussed ongoing efforts to support peace in the Middle East."

AFP/DPA/The Local (news@thelocal.de)

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Your comments about this article

09:02 April 29, 2010 by Tobsen
Love the picture!
10:37 April 29, 2010 by dbert4
Amazing how the American ALWAYS have "advice" for Germany dealing with issues which aren't really their business.
11:03 April 29, 2010 by hkypuck
as an American and an isolationist, I agree that the US has no business telling Germany what to do with their economy. But I think, based on Obama's recent history of throwing money around, we can assume he is encouraging a bailout of Greece. I mean let's get real: There's no such thing as a 'loan' anymore. Call it what it is: a gift (oh wait, that doesn't translate quite right in German, as "das gift" means "poison").

These 'bailout' situations always remind me of when my dad used to LOAN me money to go to the movies. I never paid HIM back either.

Someone please tell me how we determine the worth of a Euro (or Dollar, or Crown or...?)? If a country can lose 75 billion euros, really, what's the value of a single euro?

...besides a tasty shoko-croissant! - hey there's an idea, send Greece 75 billion shoko-croissants. Ha, then no one would (or should) go to the nude beaches in Mykonos!!
11:18 April 29, 2010 by Prufrock2010
It's a global economy, like it or not, and the U.S. has a significant stake in the outcome of this fiasco. Obama would be remiss were he NOT to consult with Merkel on this issue. But there are those who will vilify him no matter what he does or doesn't do. This thread is no exception.
11:46 April 29, 2010 by mhdamro
Guys ... I think u have forgot that the US is the largest contributor to the IMF .. which will be lending money to Greece too ... so .. they are also paying for it ... they just want the Germans to pay a bigger cut ............... i think Greece is not that of a big problem .. i am afraid of the other countries who are in the same sh$% .. but are pointing fingers out to Greece .. i mean Portugal, Spain ... and the most notorious ITALY .... ... just search on the web for their Debt to GDP ratio...
11:48 April 29, 2010 by dbert4
@Prufrock2010-True, I was referring more to the way that the US has been for years pushing for Turkey to be given EU membership.
11:50 April 29, 2010 by Celeon
Silvio just has to call his mafia friends in Sicily, the great families have enough money to bail out Italy if it comes to that. :-D
12:01 April 29, 2010 by mhdamro
12:47 April 29, 2010 by Jordano
The most important thing now is try to save the euro. It already lost 20% of its value , and outcomes iare disastrous in case Greece bankrupt or left the euro zone.
17:35 April 29, 2010 by nepo77
Germany is fine with a euro / dollar parity cause it would kickstart the economy. Obama's Plans to transform the US to a export nation would be useless though, so Obama has to occasionally remind the Germans who's the boss on planet earth.
18:08 April 29, 2010 by wmm208
Merkel had it so good with her Bush relationship. He always courted her. Obama couldnt give a rats a*s. She is frustrated that he doesnt court her and that she doesnt know how to communicate or do politics on his level. He also knows he controls the most powerful nation in the world.
00:37 April 30, 2010 by wmm208
Barack, I have to tell ya, I wish we had JUST a housing crisis. We have no more money but we have to give and give and give. Giving is not in our blood. We want to take! pay, pay, pay.....
01:44 April 30, 2010 by baltog
I just mobilised all my neurologist capacity for defind out the category of Merkel;s mental retardation in this picture!
03:29 April 30, 2010 by zzzxtreme
Fantastic photo! Greece needs to make cuts, even pension cuts. This is unfair to germans
03:55 April 30, 2010 by wmm208
So viel stress haben in Germany. If you move to greece you could work less and retire early. Is that why you Germans are always stressed and experience burnout? Stress? Schade...I think the Greek lifestyle is so much better. Germans should take a lesson of all this about "burnout" and "stress haben" after they hand over money to Greece because the Greeks got it right!
05:05 April 30, 2010 by pmach
Nice comment by wmm208 after his lobotomy. Like every industrialized country sucks but the Greek's got it good LOL...as they riot in the streets in the face of the nightmare of what their little future they have left. Taxed so high businessl leave in droves and double digit interest rates that will depress house equity and the economy into a standstill to absolute zero ya.... sounds like paradise if you had a lobotomy.
07:22 April 30, 2010 by wmm208
Greece is Germanys problem too. German banks need to be saved, So send the money now. pay, pay, pay...
10:13 April 30, 2010 by Essertpitay
Beware of Greeks bearing gifts...Why suddenly their government seems so eager to be "accomodating". I bet the situation is much worse than they say it is...

Let the whole place become ruins...
14:32 April 30, 2010 by Prufrock2010
This article is misleading at best. As the International Herald Tribune reports today, "Obama administration takes a hands-off role in widening E.U. debt crisis." And rightly so.

18:42 April 30, 2010 by Prufrock2010
The difference is that the Fed got most of its money back, but Germany will never see a cent from Greece. This will not be a loan, it will be a gift -- pouring money down a rat hole.
19:19 April 30, 2010 by wmm208
Seems like Germany pays for vermin. Schade...
20:23 April 30, 2010 by rebelcowboy77
Now that Greece's loans are crashing.... Die Deutsch Vierte Reich (I mean EU) should form a coalition force (I mean group) to take over (I mean oversee) the reorganization and rebuilding of Greece from the government on down just like the US Feds did for AIG. They might want to consider using the Wehrmacht (I mean UN) to supress (I mean manage)the riots (I mean peaceful protests) when the angry mob (I mean peace loving Greek people) is really p#$$ed (I mean in nonagreement) over the takeover(I mean change) in management. I wonder what the cost difference is between bailout and invasion? I can see that an invasion could net future dividends but not a bailout. A bailout will just get them back to status quo and they'll be back for a handout in another ten years or so.
21:18 April 30, 2010 by Prufrock2010
Sometimes I regret that Obama didn't let the entire American economy completely melt down so that all the Bushies would now be living under freeway overpasses where they belong.
23:38 April 30, 2010 by Beachrider
As to the EU and IMF bailing out Greece, the terms will be severe. The unrest will grow within Greece. You should be suspicious if it doesn't.

The ECB economies (Sweden & UK are like USA and are IMF-only for this) will share the load of back-stopping Greece. Just be careful, like others have said, Portugal and Spain are not far behind. The EU is not expecting the rebound that Asia-Pacific and North America are expecting this year. You don't want to have this activity wreck the Euro or depress the ECB economies.
00:20 May 1, 2010 by Prufrock2010
Which is precisely why this bailout is happening. It is not about Greece, it's about saving the euro. But you are right -- Portugal, Spain and especially Ireland are not far behind. Therein lies the problem.

But, the currency speculators are going to drive this issue. They targeted Greece, now they will target the others in order to devalue the euro and bring it to the brink. Germany will profit from this decline, as its exports will increase. The question is, will Germany's short-term gain offset its long-term obligations as part of the EU to rescue profligate economies within the euro zone?

If the U.S. raises its interest rates, capital will again flow to America. The euro, in my view, is very vulnerable at the moment. Portugal, Spain and Ireland could spell its doom. Greece is just the canary in the coal mine.
03:10 May 1, 2010 by Hibernicus
No one would have to bail anyone out if the so-called "Ratings Agencies" were declared Enemies of the People and closed down.

Anyway, if the 4th Reich(EU) doesn't save the EURO it will go down as well. Argentina told the IMF gang to f-off and still survived. Grass will still grow and the Sun will still shine even if Capitalism and all its poisonous works goes down the tubes.
22:50 May 1, 2010 by Prufrock2010
Hibernicous --

Argentina could still print its own currency and control its inflation. Greece cannot. Therein lies the problem.
02:08 May 2, 2010 by wmm208
I hear defeatists...Typisch....
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