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US Secretary of State Hillary Rodham Clinton is passionate about women’s sport. Indeed, her “GO U.S.” cheer and pumped-fist shake at the end of a news conference here on Sunday, stirred no surprise among staff, retinue and reporters who asked her about the Women’s World Cup final between the United States and Japan.
The real surprise? Ms. Clinton’s blazing cheer-leading of Greek Prime Minister George Papandreou and his struggling attempts to fix Greece’s crisis-wacked economy. “The U.S. strongly supports the Papandreou government’s determination to make the necessary reforms to put Greece on sound financial footing,” Ms. Clinton told a news conference in Athens, the second stop of a 12-leg diplomatic tour.
She said a new and brutal batch of $110-billion budget cuts that Mr. Papandreou’s government passed last month amid heated public protest, signalled “decisive leadership.” More importatly, she conceded, Washington had “a lot riding” on its “unequivocal support of Greece’s road to growth.”
True. The stakes are high. Still, there are strong echoes of America in the ongoing Greece financial crisis. The US federal debt figures — forecast to reach about 140 per cent of gross domestic outcome in a couple of years — are becoming frighteningly familiar. Greece’s public debt is due to jump to 158 per cent of its total economic output by the end of the year, up from 142 per cent in 2010. Both countries face the imminent threat of default ratings by US-based credit agencies. And both lack collective political action in resolving their crises.
So why the cheerleading? Because in an era of growing global interdependence, pundits and analysts argue, two United States are better than one. This week will be crucial. As US President Barack Obama has given increasingly rancorous negotiations with the Republicans until the end of next week to reach agreement on the terms for raising the $14.3-trillion US debt ceiling, Mr. Papandreou will take to Brussels on Thursday to meet with his European counterparts and craft some sort of second bailout for his country.
If Papandreou fails, a potentially ruinous debt crisis may shatter the European Union and set US markets to a dangerous spasm. As Jamie Dimon, chief executive of JP Morgan, one of Wall Street’s biggest banks put it recently: “No one can tell me with certainty that a U.S. default wouldn’t cause catastrophe and wouldn’t severely damage the U.S or global economy. It would be irresponsible to take that chance.”
America and Europe are hanging in the balance.
Source Globe and Mail