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'Debt relief is crucial for Greece', U.S. president says

Starting out by addressing reporters in Greek, U.S. President Barack Obama on Tuesday recognised the very difficult times faced by ordinary Greek men and women during the long years of crisis, in joint statements with Greek Prime Minister Alexis Tsipras in Athens.

"This crisis in not an abstraction. It has had a very concrete devastating effect on the lives and livelihoods of millions throughout the country," he said.

Obama noted that much of the discussion with the Greek prime minister was focused on the economic situation and how Greece can continue going forward. He said Tsipras had outlined the steps and reforms he will take to "prevent the kind of imbalances that led to the public debt crisis in the first place and make the country attractive to investments."

Greece was now on the road to recovery and In order to make the reforms sustainable in the long-term, the Greek economy needed 'space' to turn around and generate jobs, Obama said. "Austerity as a strategy" cannot be the way to generate growth, the U.S. president added, noting that Greeks had to see improvement in their daily lives.

Noting that Greece was continuing reforms, Obama also pointed to the International Monetary Fund (IMF) position that debt relief was crucial. "I will continue to encourage the creditors to take the steps needed to put Greece on the path of recovery," he said. 
"We all want Greece to succeed, we all want the Greek people to prosper," Obama added, noting that this would be good for Greece, for Europe, for the United States and for the world.

Among the economic problems discussed with Tsipras, Obama added, were the serious challenges they faced as allies in NATO and he congratulated Greece as one of only five countries in NATO that continues to spend 2 pct of its GDP on defence, even during the difficult years of crisis. If even crisis-stricken Greece was able to meet this target, he noted, then all the NATO allies should be able to do the same. 

Obama said they also discussed the importance of exchanging information in order to prevent terrorist attacks and maintaining sanctions, including those of the EU, against Russia until Russia fully meets its obligations on the basis of the Minsk agreement.
The U.S. President praised the "extraordinary compassion shown" by Greeks, especially on the islands, toward migrants and refugees in spite of their own economic hardships. He said that Tsipras had promised to increase housing for migrants and refugees and access to education for children. He promised that U.S. will continue to help with refugee crisis as much as it can, noting that the problem was not Greek but international.

Obama said he had also reaffirmed the support of the U.S. for the agreements between the EU and Turkey as the best way of dealing with the arrivals in Europe in an orderly and humane way.

On the Cyprus issue, the U.S. president said that the "prospects for a just, comprehensive and lasting settlement are the best they had been for some time."
"This does not mean that success is guaranteed," he clarified, but that a possibility for resolving a decades-long conflict is there. He said a bizonal, bicommunal solution was in the best interests of all Cypriots, leading to a solution that was viable in the long term and create prospects for all people on Cyprus.
"Such a solution is possible and it would be an excellent example for the world, showing what diplomacy can do," Obama added.

The U.S. president concluded by saying that he looked forward to addressing the Greek people on Wednesday, noting that Greece remains one of the closest allies and friends of the United States.
Replying to press question on his country’s unemployment and GDP as compared to the results in Greece during the years of crisis, and whether Greece's programme was attainable without debt relief, Obama noted that the two economies were not strictly comparable though both had experienced severe economic contraction and lost jobs.
Obama said he had taken over at a time when the U.S. economy was contracting faster than during the Great Depression but "we took measures, learned from our mistakes, stabilised the economy and returned to growth."
"One of the lessons we learned is this: it is important to combine structural reforms and good fiscal stewardship, along with a growth strategy," he said, noting that cutting spending when the economy was contracting would lead to further contraction. The U.S. president admitted, however, that the U.S. was in a better position to do this than Europe, since it was one country and also had the dollar, which continued to be the world's reserve currency, giving it greater flexibility.
"The key lesson we drew from our experience was that particularly when the economy is still struggling, putting people back to work and doing things to spur economic activity -ultimately this is the factor that reduces structural deficits and debts."
He noted that Greece had had to endure some difficult measures but was on the right path, making its economy more competitive and attractive to investors by carrying out the structural changes necessary in a globalised economy.
"Even, however, when you are carrying out structural reforms, our position has always been that when an economy is contracting this fast, when unemployment is so high, there also has to be a growth agenda," he emphasised. "It is difficult to imagine the kind of growth surge that's needed without some debt relief," he said.
Obama expressed understanding for the European governments in the north that faced pressures from their own voters and were  resistant to such debt relief formulas. However, he added, having seen Greece begin many of these difficult steps, carry out difficult structural reforms, commit to making changes and all the Greek people have been through, there was an opportunity for the both sides to recognise the need to arrive at a solution, instead of coming back every year or six months a new negotiation. "That would be good for everyone. Now that the Greek economy is back on a path to growth, maybe this is the right time, he added.