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February 25, 2010

Greek PM Warns Tomorrow Will Be 'Too Late' to Act on Debt

by Jeff Seldin

European leaders are increasing pressure on Greece to slash its debt before the country's financial crisis sparks even bigger problems.  Now, Greek Prime Minister George Papandreou is urging lawmakers to act quickly and forcefully. The situation has the attention of some top U.S. officials.

Talk of more cutbacks in Greece has not gone smoothly, with thousands of Greeks protesting the proposed austerity measures this week on the streets of Athens.

On Friday, Greek Prime Minister George Papandreou told lawmakers the time for drastic action is now because "tomorrow it will be too late." "If we don't make deep cuts today, tomorrow the crisis will once more choke this country, and once again the people will be forced to pay for previous mistakes," he said.

He said without deep cuts the crisis will choke the Greek economy.

He also called for more support from Europe. "We are asking for solidarity from the European Union, just as they are asking that we meet our obligations to put this country in order. We will respond, whatever the cost and no matter how painful it will be for us, but in the most fair way. And we will ask for solidarity, and I believe we will get it," he saID.

Mr. Papandreou asked for the European Union to be fair and show solidarity.

But the situation is tense. EU experts visiting Greece this week said the country must do more to rein in its crushing debt.  And many officials blame Greece's problems for pushing down the value of the euro.

Some officials have even suggested the euro monetary system could collapse if Greece defaults on its debts.

There has also been no official word on any sort of European aid package.

Following a meeting with the Greek prime minister Friday, the chief executive of Germany's private Deutsche Bank was evasive. "No, I am regularly in Greece because I love Greece, beautiful weather, and then I normally see clients and government officials," he said.

When reporters asked about possible help…"No comment. No comment," he said.

The Greek crisis also has the attention of top officials in the United States.

Central bank chief Ben Bernanke, has told lawmakers some private banks may have helped Greece hide the severity of its problems. "We are looking into a number of questions related to Goldman Sachs and other companies in their derivatives arrangements with Greece," he said.

He said several agencies are investigating. "Obviously, using these instruments in a way that potentially destabilizes a company or a country is counterproductive," he said.

Bernanke also expressed concern about the possible impact of investment instruments that bet Greece would default on its debt.