Obama Says Greece Needs Growth, Not More Austerity
- by XpatAthens
- Thursday, 19 February 2015
As representatives of the new Greek government begin a round of visits to eurozone countries, President Barack Obama has suggested that Greece will not be able to recover from its economic crisis unless there is a let up in austerity policies. “You cannot keep on squeezing countries that are in the midst of depression,” when CNN’s Fareed Zakaria asked him about the case of Greece.
“At some point, there has to be a growth strategy in order to pay off their debts and eliminate some of their deficits.
“There is no doubt that the economy of Greece was in dire need of reform,” he said in the interview broadcast on Sunday. “Tax collection was famously terrible. In order for Greece to compete in the world markets, they had to initiate a series of changes.”
However, the US president underlined that it is very difficult to carry out reforms when a country’s economy has contracted dramatically. Greece saw almost a quarter of its GDP disappear between 2008 and 2014.
“It’s very hard to initiate those changes if people’s standards of living are dropping by 25 percent,” he said. “Over time, the political system and society cannot sustain it.”
Obama also made reference to the compromise that would be needed by the SYRIZA-led coalition and the eurozone to reach a deal that would keep Greece in the single currency.
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