Greece must balance austerity measures demanded by international lenders with growth if it wants to recover, U.S. President Barack Obama told visiting Greek Prime Minister Antonis Samaras in a meeting in the Oval Office of the White House on Aug. 8 where the Greek leader was making his most important stop during an eight-day swing to the United States.
Obama said Samaras must find a way to get people back to work, hours after the Greek statistical agency ELSTAT released a report showing the jobless rate set another record of 27.6 percent, some 64.9 -percent for those under 25.
Samaras said he has a plan to employ 75,000 young people in January but hasn’t detailed it, nor what kind of jobs they would be or what they would be paid as the government has also cut the minimum wage to 585 euros ($782.75) a month before taxes.
Obama commended Samaras for taking bold steps to reduce his country’s staggering debt which still stands at some $390 billion, an amount many analysts said is unsustainable. The Greek prime minister says his citizens have made huge sacrifices that are “not going to be in vain.”
Samaras was hoping for support for pay cuts, tax hikes, slashed pensions and the coming firing of scores of thousands of workers demanded by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is putting up $325 billion in two bailouts.
Pay cuts, tax hikes, slashed pensions and the coming firing of scores of thousands of public workers has worsened Greece’s six-year recession while making barely a dent in its debt but the IMF said Greece must persist with the same formula.
Cyprus unification, trade and counter-terrorism initiatives were also are on the agenda, the White House said. The White House meeting preceded the Sept. 22 elections in Germany, where Chancellor Angela Merkel is seeking a third term with a promise that Germany won’t ease pressure on Greece to make reforms needed to continue receiving aid it’s received since the debt crisis almost four years ago.
The meeting also follows the July 31 release of a report by the International Monetary Fund that said Greece, now in its sixth year of recession, probably will need more money from Europe to meet its bailout objectives, while 4.4 billion euros ($5.8 billion) in financing as part of a rescue package next year has yet to be identified.
“It’s an important bit of visual and substantive stagecraft,” Douglas A. Rediker, visiting fellow at the Peterson Institute for International Economics in Washington, said of the meeting.
Laura Lucas, a spokeswoman for Obama’s National Security Council, said Obama had a chance to express support for Samaras’ reform efforts.“The United States has an important stake in a Europe’s economic health, and in Greece’s, so we will be talking about ways we can support the structural reforms ahead of Greece to accelerate a return to growth,” Lucas said in an e-mail.
The visit may provide Samaras an opportunity to send a message to Merkel to ease off on austerity. Greece’s Minister for Administrative Reform, Kyriakos Mitsotakis, in the Athens newspaper Kathimerini, said Samaras planned to tell Obama that “austerity has been pushed too far” and that additional efforts to tax incomes “will not fly.”
In last year’s debt restructuring, under which Europeans and the IMF hold most of Greece’s debt, Greek debt is targeted to fall to 124 percent of gross domestic product in 2020, from 176 percent of GDP this year.
U.S. Treasury Secretary Jacob J. Lew said on July 21 after meeting with Samaras in Athens that the U.S. recognizes “difficult decisions and shared sacrifices” Greece has made while “continued reform will be essential to laying the foundation for sustained growth.”
(Material from the Associated Press and Bloomberg was used in this report)