Obama Wants Greece in Eurozone – Until U.S. Election

Apparently anxious that a Greek default could harm his re-election chances, U.S. President Barack Obama is reportedly squeezing European leaders not to do anything that could force Greece out of the Eurozone before the American elections in November.

The British newspaper The Independent wrote that British sources have said that the Obama Administration is fearful of the fall-out on the U.S. economy if Greece tanks and the ripples affect the Eurozone and world markets.

Representatives from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) and the European Commission are due to arrive in Athens next month to assess Greece΄s reform efforts as the country attempts to make another $14.16 billion in cuts to insure the continuation of rescue loans.

They are expected to make a report in time for an Oct. 8  meeting of the Eurozone finance ministers which is expected to decide whether to release a $38.8 billion installment, the last in a first series of $152 billion in rescue loans, without which Greece would not have enough money to pay workers and pensioners. The country has already stopped paying its bills. For the long-term, the Troika is withholding a second bailout, of $173 billion, until the uneasy coalition government led by New Democracy Conservative Prime Minister Antonis Samaras makes the cuts and imposes more austerity.

Samaras said Greece needs two more years to reduce the country’s deficit from 9.3 to 3 percent and get a privatization program going. American officials are understood to be worried that if they decide Greece has not done enough to meet its deficit targets and withhold the money, it would automatically trigger Greece΄s exit from the Eurozone close to the Nov. 6 President ballot.

The Independent said American officials are urging Eurozone governments to hold off from taking any drastic action before then. European leaders are thought to be sympathetic to the lobbying fearing that, under pressure from his party in Congress, Republican Mitt Romney would be a more isolationist president than the Democratic Obama.

The President discussed the Eurozone crisis with British Prime Minister David Cameron during a conference call on Aug. 22, and both welcomed statements by the ECB that it was “standing firmly behind the euro.” The ECB is expected to present a plan in the next few weeks to help indebted countries like Spain and Italy by buying their government bonds to keep the Eurozone from becoming more fragile.

(source: The Independent, Capital)