Obama 'very concerned' about Greek debt crisis

(AFP) – 2 days ago

WASHINGTON — US President Barack Obama said in an interview released Saturday that he was "very concerned" about the Greek debt crisis and its impact on European economies.

"I am very concerned about what's happening in Europe," Obama told Russia's Channel Rossiya in an interview conducted at the White House on Thursday.

"But I think it is an issue that the Europeans recognize is very serious."

Fears in past months that Greece would be unable to maintain debt payments sent its borrowing costs soaring, sapped the euro and put the spotlight on other weak European economies.

"If we can stabilize Europe that will be good for the United States," Obama said.

His remarks came ahead of an imminent and unprecedented bailout from the European and the International Monetary Fund worth 140 billion dollars badly needed by debt-hit Athens.

On Sunday, the IMF's governing body will to vote on Greece's request for a 40-billion-dollar loan from the world lending institution.

Obama commended Greece for its proposed "very difficult measures" of some 30 billion euros (38 billion dollars) in tax hikes and spending cuts.

But Greece was still plagued by concern that the draconian austerity measures could plunge the recession-hit Greek economy into deeper trouble, dampen productive initiative and create cracks in social cohesion.

Washington has strongly backed the bailout for Greece, saying it has the potential to help restore stability to the country, and the global financial community.

Three general strikes have been held in the last three months against the government's economic policies, and a senior member of Greece's main union warned its members to be prepare for another.

Obama pointed to the Greek crisis and the impact it has had on world markets as one of the "real threats" to US well-being.

Panic swept US markets on Thursday as the Dow Jones Industrial Average plunged nearly 1,000 points, a record intra-day drop, before recouping more than half those losses.

It remains unclear whether the sudden sell-off was the result of fears over the Greek debt crisis, mistaken trade transactions or technical error.

Greece's total debt stands at nearly 300 billion euros and there is growing concern that the government will face severe difficulty in implementing the harsh cuts with the economy set to shrink by four percent this year.

The parliament in Athens has become a focal point for successive street protests. Violence erupted on the sidelines of a massive demonstration on Wednesday and clashes between young protesters and police also broke out Thursday as the chamber approved the austerity plan.

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