Obama on Greece: “Austerity is not effective; there must be growth”

When the economy is in freefall, you need a strategy of growth, not just pressuring a population that is suffering more and more, U.S. President Barack Obama said in interview to CNN, in response to a question about Greece.

According to AMNA, asked whether he agreed with new Greek Prime Minister Alexis Tsipras that “austerity is not effective,” Obama said that you cannot continue to pressure countries in recession – at some point there must be a strategy of growth in order for these countries to be able to repay their debts and reduce some of their deficits.

He said there is no doubt that the Greek economy was in urgent need of reforms, and that the collection of taxes in Greece is famously tragic. In order for Greece to become competitive in the global market, they should have put a series of changes in the pipeline. These changes, he said, are very hard to achieve if the people΄s living standard has droped by 25% – this cannot be sustained either by the Greek society or the political system.

Obama expressed the hope that Greece will remain in the eurozone, which would require compromises on all sides. When the economic crisis showed up a few years ago, the United States had an active role in the effort to resolve it. Germany and others, he said, understand that it would be better for Greece to remain in the eurozone than leave it; it΄s a situation that the markets do not like.

The U.S. president said he was concerned about growth in Europe and that fiscal discipline was significant, while structural reforms are necessary in many of these countries. He added however that the American experience is that the best way to reduce deficits is to restore fiscal balance, grow, and when you have an economy in free fall, there must be a strategy of growth and not just try to pressure a population that is suffering more and more.