Crisis may spread, PM warns US

Commencing an official visit to Washington after high-level meetings in Berlin and Paris, Prime Minister George Papandreou said yesterday that the current economic crisis engulfing Greece, and the eurozone, also posed a threat to the US and stressed the need for a Euro-Atlantic effort to avert a broader predicament. «If the European crisis spreads, it could create a new global financial crisis with implications as grave as the one that originated in the US two years ago,» Papandreou told the Brookings Institution, a Washington-based think tank. He called on the US to join European nations in cracking down on market speculators which he has blamed for aggravating Greece’s economic woes. «It won’t be easy, but together we can respond to the challenges thrown up by economic globalization,» he said. US Secretary of State Hillary Clinton said late last night that Papandreou had «not asked the United States for anything» but that the pair had discussed the need for financial reforms in major global economies as well as a crackdown on speculators. Papandreou, who is to meet US President Barack Obama in Washington today, has been assured of Germany’s political support as well as «precise measures» of economic support from France, should these be necessary. Meanwhile in various European capitals, the idea of a European monetary fund, to rival the Washington-based International Monetary Fund, appeared to be gaining ground. After German Finance Minister Wolfgang Schaeuble broached the idea at the weekend, Chancellor Angela Merkel yesterday branded it as «a good and interesting idea.» «Our instruments are not adequate» to cope with crises like the current one, Merkel said, adding that «we want to be able to resolve our problems in the future without the IMF.» In Athens a new round of strikes began against additional austerity measures voted through Parliament last week. Tax collectors launched a two-day walkout and court staff launched the first in a week of rolling work stoppages. The country’s main labor union has called a 24-hour strike for Thursday.

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