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Obama urges less austerity in Greek recovery
[WASHINGTON] Greece will not deliver a strong economic recovery unless authorities loosen austerity programs, US President Barack Obama suggested in remarks that aired Sunday.
"You cannot keep on squeezing countries that are in the midst of depression," Obama told CNN's "Fareed Zakaria GPS" when asked about the situation in crisis-hit Greece.
"At some point, there has to be a growth strategy in order for them to pay off their debts to eliminate some of their deficits." Obama said the Greek economy was in "dire need" of reform but warned that drastic changes were tough to implement in a struggling economy.
"It's very hard to initiate those changes if peoples' standards of living are dropping by 25 per cent. Over time, eventually, the political system - the society - can't sustain it," the US leader said.
Greece's economy has shrunk by a quarter since 2008. Finance Minister Yanis Varoufakis said he wanted to reach a new agreement with international creditors on his country's debt burden by the end of May.
Europe, particularly Germany, is watching Greece's new far-left government after the anti-austerity Syriza party swept to victory last month promising to try to write down half of Greece's debt.
Obama said he hoped Greece would remain in the eurozone, but cautioned that it would take "compromise all sides." Of broad concern, the president added, was Europe's growth rate.
"Fiscal prudence is important, structural reforms are necessary in many of these countries, but what we have learned in the US experience... is that the best way to reduce deficits and to restore fiscal soundness is to grow," Obama said.
"When you have an economy that is in a free fall, there has to be a growth strategy and not simply the effort to squeeze more and more out of the population that is hurting worse and worse."