By Merle David Kellerhals Jr.
Staff Writer
Washington — Efforts in Europe and the United States to curb excessive financial speculation, believed to be a significant factor in the global recession, will be on the agenda for the annual meeting of the Group of 20 advanced and emerging economies, Greek Prime Minister George Papandreou said after a White House meeting with President Obama March 9. Papandreou was in Washington for consultations with key U.S. leaders on the financial crisis that has gripped his country and pushed the government’s budget deficit to 12.7 percent of Greece’s gross domestic product, which is the sum of the goods and services produced in the nation. Papandreou is attempting to reduce the deficit to about 8 percent of GDP, and he blames much of the nation’s economic woes on widespread financial speculation that is largely unregulated in markets across the globe. The G20 nations are set for a summit June 26–27 in Toronto following a Group of Eight summit in Huntsville in Canada’s Ontario province June 25–26. The G20 customarily meets twice a year and is scheduled for another summit in Seoul in November. “Among our most pressing, shared challenges today is the global economic crisis that has thrown people out of work, shuttered businesses, drained government coffers in both the United States and Greece,” Secretary of State Hillary Rodham Clinton said at a press conference with Papandreou March 9. “I want to commend the prime minister for his leadership in tackling the challenge that he confronted upon taking office.” “We support Greece and the tough economic measures it is taking to address this issue,” Clinton said. Papandreou is implementing measures designed to reduce government spending and repair the nation’s tax system. Clinton said neither the prime minister nor the Greek government has asked the United States for financial assistance. Papandreou was in Washington for U.S. support in the G20 to push for changes in rules governing speculative financial instruments that have been used “to the detriment not only of Greece, but of other nations, including our own,” Clinton said. While in Washington, Papandreou, who assumed office in October 2009, also met with Treasury Secretary Timothy Geithner. White House press secretary Robert Gibbs said the administration believes the European Union is in the best position to help Greece manage its economic situation. “What I think the Greeks have said, what I think the Europeans have said and what we’ve said from this podium is that this is an issue for the European Union,” Gibbs said at the daily White House press briefing. “We believe they have and possess the capabilities to solve that. And the president … believes that this is something that the Europeans can and should resolve on their own.” Papandreou told an audience at the Brookings Institution in Washington that he is urging the United States to join with the European Union through the G20 in taking “decisive and collective action” regarding financial regulation. At two summits in 2009, G20 leaders debated regulatory regimes aimed at curbing highly speculative financial activity such as hedge funds and credit default swaps. Credit default swaps are an unregulated and unmonitored form of insurance that promises payment to investors if a borrower defaults. |
