Obama to Show Support for Greece as Samaras Visits White House

By Margaret Talev - Aug 8, 2013

Bloomberg

President Barack Obama will show U.S. support for Greece at a meeting today with Prime Minister Antonis Samaras as Greece prepares for more talks with creditors on additional debt relief.

Cyprus unification, trade and counterterrorism initiatives also are on the agenda, the White House said in a statement ahead of the visit.

The White House meeting precedes 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.

Today’s meeting also follows the July 31 release of a report by the International Monetary Fund that said Greece, now 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 today’s meeting.

Obama and Samaras aren’t likely to get deep into technical finance issues so much as to promote the message that “the U.S. remains supportive of Greece,” said Rediker, who represented the U.S. on the IMF’s executive board from 2010 to 2012.

Election Timing

That message also may be couched with an eye to timing.

“Whether political leaders and policy makers acknowledge it or not, much of the dynamic around the euro zone is somewhat frozen, pending the outcomes of the German elections,” Rediker said.

“The IMF has been very careful in the language,” he said. “Greece is supposed to continue to adhere to agreed upon conditions, and if there is a hole that develops, as anticipated, the Europeans will be expected to make up that hole,” he said.

Laura Lucas, a spokeswoman for Obama’s National Security Council, said Obama will have a chance to express support for Samaras’s 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.

Samaras’s Message

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.”

To contact the reporter on this story: Margaret Talev in Washington at mtalev@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net