US: Greek referendum shows need for rapid implementation

1 November 2011 21:42 (UTC+04:00)

Greece's surprise plans to submit Europe's hard-wrought debt-bailout deal to a referendum showed the need for quick action in the eurozone to execute the plan, the White House said Tuesday, DPA reported.

"The announcement (Prime Minister George Papandreou) made just reinforces the notion that ... the Europeans need to elaborate further and implement rapidly the decisions they made last week," said spokesman Jay Carney.

Papandreou's announcement of the vote sent shock waves across global markets and stunned European leaders, who called for an emergency meeting Wednesday in Cannes, where the G20 meetings are sated for Thursday and Friday.

The two-year-old European debt crisis has played havoc with markets and spawned uncertainty about the euro's future. Last week, after months of grappling, leaders in the eurozone agreed on bank recapitalizations, a beefed-up bailout fund and lender sacrifices on Greek debt.

But a Greek referendum, possibly in January, would add months of uncertainty and threatens the prospect of rejection, which could result in Greece defaulting on its debt.

Carney insisted that the US believes that "the Europeans have the capacity to deal with this crisis, and they need to implement the very important decisions they made last week to provide a conclusive resolution to it."

He said that the Obama administration has actively advised and guided Europeans as they work through the "crisis in the eurozone."

"But it is a European problem that needs to be addressed. And we will continue to work with them and consult with them as they do," Carney said.

At the G20 summit later this week, the US will be pressing Europeans for more information about the details of the debt bailout plan unveiled by European leaders last week to contain the two-year financial upheaval.

The plan calls for banks to accept a 50-per-cent loss on loans to Greece and beef up the eurozone's bailout fund to 1 trillion euros (1.4 trillion dollars).

"We are looking forward to hearing more at Cannes about the further elaboration and implementation of these elements," Lael Brainard, treasury department under secretary for international affairs said Monday.