Tsipras-Obama joint statements: Τhe Greek economy needs ‘space’ in order to recover, Obama said

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.

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“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 said, 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.

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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 said.

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 and 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.

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Greek Prime Minister Alexis Tsipras said that Greece was welcoming a U.S. president that had strongly defended the values and democracy and freedom, fighting for the rights of all irrespective of race, sex, colour and religion.

Hailing Obama presence in Athens and later in Berlin, at a time when decisions would be made that concerned all of Europe, Tsipras stressed that cooperation and solidarity was necessary for the of solutions that will once again stabilise European edifice put it back on the rails toward progress.

Tsipras dwelt especially on the U.S. president’s very different approach to the economic crisis that erupted in 2008, noting that he had taken the U.S. economy down a completely different path from that chosen by Europe. The results, eight years later, were more than visible, the prime minister added.

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“The decision to expand the monetary base and emphasis on boosting employment led to impressive growth rates and a steady reduction in unemployment,” Tsipras pointed out. “On the other hand, the European leadership’s insistence on austerity keeps European economies trapped in stagnation, creating incalculable political and social problems.”
The Greek prime minister said his meeting with Obama had given him an opportunity to discuss the economic challenges facing Greece and all of Europe, “challenges that if not faced in a collective and decisive way could lead us to political and social regression.”

They agreed, Tsipras said, that modern societies needed hope and prospects to fend off the rising scepticism and national retrenchment that now threatened them. The international community had seen the need for this clearly whenit had agreed to a debt settlement for defeated Germany in 1953, linking this to a growth clause. Now, a strong Germany that was the economic powerhouse of Europe has a duty to do the same, Tsipras said.

“Greece and the Greek people faced the harshest consequences of crisis, with a disastrous austerity programme that made the problems worse instead of solving them. In four years, we lost 25 pct of our GDP and unemployment soared to 27 pct. Now we have managed to get back on our feet, have succeeded in avoiding the disaster that threatened and are rebuilding our economy step by step… we are restoring confidence in the prospects of the Greek economy,” he said.

Tsipras acknowledged Obama’s very important support when the Greek crisis was at its peak in the summer of 2015, and his role in achieving a positive outcome when the six-month-old SYRIZA government had been forced to make some tough decisions “not just to stay in eurozone but to preserve EU’s unity.”

“I believe we made the right choices, historically,” Tsipras said, while adding that after seven years of tough measures, Greece’s economy and society “cannot cope with more austerity.”

A reduction of the debt, revision of the agreed surpluses after 2018 and Greece’s entrance in the European Central Bank (ECB) quantitative easing programme were what Greece had a right to expect on the basis of the existing agreements, he added, and the time to do this was now.

The prime minister said his talks with Obama had covered a range of bilateral issues, especially ways of enhancing bilateral economic and trade cooperation in a series of sectors, such as energy, tourism, agro-foods, R&D. They covered significant prospects emerging via Greek shipping to make Greece a transport and energy hub linking Europe with Asia and Africa, as well as the energy infrastructure projects now underway, and potential for cooperation between Greek and U.S. businesses.

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Lastly, Tsipras referred to their discussion on regional issues, noting Greece’s role as a pillar of peace and security in a volatile region, using its position in the EU and NATO to promote peace, stability and security in the region, even more so for cross-border security and against the threat of terrorism.

Despite its serious economic difficulties, Tsipras added, Greece had offered support to the refugees that landed on its shores and stuck fast to its principles even after the Balkan corridor was closed through unilateral actions. In spite of the pressures and the limited support from many EU countries, Greece insisted that the only way to deal with the refugee crisis was to respect international law, cooperation with the countries of origin and transit and tackling the causes that led to migration.

“In this context, we underlined on the importance of the continued implementation of the EU-Turkey agreement and the continuation of the NATO operation in the Aegean. We stressed the need to do everything possible in order to ensure peace and stability in Syria, Iraq and Libya,” he said.

With regard to Turkey, Tsipras said he had underlined that respect for international law and international treaties was a condition for regional stability and security, without threats of war. With respect to his talks with Obama on the Cyprus issue, Tsipras said they both expressed support for the crucial talks now underway and noted that he will be meeting Cyprus President Nicos Anastasiades on Wednesday.

At the same time, he said there was a need for “extreme caution” at this stage, since crucial issues were still open. “Our goal is for this solution to benefit all Cypriots and contribute to the island’s progress. This cannot happen while Turkish troops remain,” he noted.