Greek Leader Not Looking for Handout From Washington, He Says

March 9, 2010 - 7:08 AM
In his meeting Tuesday with President Obama, Greek Prime Minister George Papandreou will outline the steps Greece is taking to stem its financial bleeding and reform its economy.
Washington (AP) - Ahead of a meeting Tuesday with President Barack Obama, Greek Prime Minister George Papandreou said the United States cannot afford to ignore the financial woes of his country and, by extension, Europe.
 
"For America, a weak euro means a rising dollar. That, in turn, means a rising U.S. trade deficit," Papandreou said Monday. "If the EU, still America's biggest trading partner, should falter, the consequences here would be palpable."
 
Papandreou also said he is not looking for a handout from Washington. Instead, Greek officials want to see the United States impose stricter regulations on hedge funds and currency traders, which Athens believes aggravated their crisis.
 
In his meeting Tuesday with Obama, and in sessions during the week with Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy Geithner, Papandreou will outline the steps Greece is taking to stem its financial bleeding and reform its economy.
 
Papandreou's trip to Washington 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 last 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 said the solution lies with support from European Union countries. He is in the United States as the Obama administration and 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 would try to show the White House how hedge funds made the crisis worse by betting on Greece defaulting on its loans, then seeking to make that result more likely.
 
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. "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."