World Economy

Greece Anti-Austerity Drive Gets US Boost

Greece Anti-Austerity Drive  Gets US Boost Greece Anti-Austerity Drive  Gets US Boost

Greece’s new government received welcome support from US President Barack Obama on Sunday for its efforts to loosen austerity programs amid tough rhetoric from its European creditors.

The leftist government of Prime Minister Alexis Tsipras is in a race against time to secure greater leeway from its European partners as it seeks to deliver on a campaign pledge to reverse the belt-tightening measures stifling Greece’s economy, France24 reported.

When asked about the situation in Greece, Obama said the crisis-hit country would not deliver an economic recovery unless the government is allowed to pursue growth through fiscal stimulus.

“You cannot keep on squeezing countries that are in the midst of depression,” the US president told CNN. “At some point, there has to be a growth strategy in order for them to pay off their debts to eliminate some of their deficits.” Obama said the Greek economy was in “dire need” of reform but warned that drastic changes were tough to implement in a struggling economy.

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Last month’s election triumph for Syriza, a radical left-wing party that was virtually unknown just a few years ago, suggests the patience of Greek voters has indeed reached its limit after six years of “shock therapy”.

In return for two bailouts worth €240 billion ($272b), Greece has been forced to impose savage spending cuts and tax rises that, critics say, effectively killed off any chance of economic recovery. After a six-year depression, GDP has shrunk by a quarter, industrial output has fallen by a third and millions have been pushed into poverty.

The “national salvation” government has begun steps to reverse public sector layoffs, raise the minimum age, and freeze planned privatizations. But it desperately needs a let-off on austerity to deliver on its campaign promises.

Athens also wants to restructure the country’s €310 billion debt, which stands at 175% of GDP.

After talks with his French counterpart in Paris on Sunday, Varoufakis said Greece would turn down a promised €7.2 billion loan from its creditors. “It’s not that we don’t need the money; we’re desperate,” he told reporters in the French capital. “We have resembled drug addicts craving the next dose. What this government is all about is ending the addiction.”