Obama, Merkel talk on Greece financial crisis

US President Barack Obama says Greece’s growth as part of Eurozone ‘critical’

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

President of the United States Barack Obama and Chancellor of Germany Angela Merkel discussed the exacerbating debt and financial crisis in Greece, as the Greek government plans to default on a $1.8 billion IMF loan on Tuesday.

Obama  called Merkel  on Sunday to review the latest developments on Greece, after creditors refused to extend the deadline for repayment.

"The two leaders agreed that it was critically important to make every effort to return to a path that will allow Greece to resume reforms and growth within the Eurozone," said a statement from the White House.

Obama said he and his economic advisors will closely monitor the Greek crisis and its headway in the days to come. The leaders decided to stay in close communication till some progress is made.

Obama also offered condolences to Merkel over the killing of German citizens in beach resort in Tunisia on Friday.

Greece is heavily indebted to the EU and the IMF, almost 240 billion euros, since the Eurozone economic crisis seriously hit the country’s economy from 2009 to the present.

The Tsipras government has been negotiating with the IMF and the ECB, over the past four months about the release of some 7.2 billion euros in aid.

Athens says it cannot afford the $1.8 billion amount which has to be paid to the IMF by the June 30 deadline.

Eighteen countries, which are participating in the eurozone, have accused Greece of dropping out of negotiations and vowed to do all that is necessary to stabilize the Euro bloc.

Greek Prime Minister Alexis Tsipras on Sunday called his nation to vote in a referendum for bailout terms, offering proposals to reduce the pressure on bank balance sheets. Thus, each proposal comes with a cost.

The President of the European council, Donald Tusk announced on Sunday that he was associating with all the Euro currency countries and they reassured Greece will remain within the common currency zone.

Various EU officials said there was still time to snatch a late deal if Greece returns to the negotiation table.

"To those who wonder what's next, 1. Greece should stay in euro; 2.The door is still open for negotiations on latest EU Commission proposals," EU Economics Commissioner Pierre Moscovici said.

Manuel Valls, Prime Minister of France, on Sunday advised the Greek administration to follow on with talks.

"I cannot resign myself to Greece leaving the euro zone ... We must find a solution," Valls told Europe 1, Le Monde and iTELE in a joint interview.

Christine Lagarde, chief of the International Monetary Fund, announced that if the referendum vote on Tuesday resulted in "a resounding yes" to endure within the Eurozone and solve the problems of the Greek economy, then the creditors would be more assistive and lenient in sealing a deal.

TRTWorld and agencies