WASHINGTON, Sept. 23 (UPI) — The Obama administration’s former chief economic adviser, Austan Goolsbee, said in Washington aid for debt-burdened Greece has become “a morality play.”
Goolsbee, former head of the White House Council of Economic Advisers, said, “There’s a growing narrative that this is a morality play, that this is all about fiscal profligacy in southern Europe.”
Speaking as a member of a panel at the International Monetary Fund, Goolsbee said, “If the Germans are saying, ‘We don’t like the spending by southern Europe,’ they must also recognize that they’ve been the great beneficiaries,” The New York Times reported Friday.
The Obama administration, meanwhile, has been turning up the heat in discussions with European leaders to increase the financial firepower aimed at fixing the crisis.
Pressuring European leaders to act will be the major theme of the gathering of finance ministers in Washington for meetings at the International Monetary Fund and the World Bank over the weekend.
Much of the pressure is aimed at Germany, where Chancellor Angela Merkel faces a political backlash for supporting aid to Greece and other countries struggling with debt.
Pressure is also being applied to French President Nicolas Sarkozy.
While leaders have attempted to present a united front, the eurozone is still made up of 17 member nations and major decisions are slow enough among leaders and even slower as decisions are ratified in each of the country’s capitals.
But the stakes are high. “The biggest single risk to the United States today is that the European situation will spiral out of control,” said Edwin Truman, a former Treasury Department official now at the Peterson Institute for International Economics.
“Europe is not going to save the U.S. economy, but it could be the straw that breaks it,” he said.