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Greece urging US to better regulate hedge funds (AP)

Mon, 08 Mar 2010 23:52:42 GMT

WASHINGTON – Greece is urging the United States to step up regulation of hedge funds that Athens blames for making Greece's economic crisis worse.

Finance Minister George Papaconstantinou told The Associated Press on Monday that he was also seeking advice from the International Monetary Fund during a trip to Washington. He's accompanying Greek Prime Minister George Papandreou (pah-pahn-DRAY'-oh).

Papaconstantinou said meetings with the IMF on Monday did not touch on financial aid but were on advice about tax and budget reform.

He said Greece was briefing the Obama administration on those reforms and discussing global financial regulation. Papandreou is set to meet President Barack Obama on Tuesday.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) — Greece's prime minister is hoping his trip to Washington will boost efforts to get his country out of a financial crisis. But Secretary of State Hillary Clinton said Monday that Greece is not asking for any specific help from Washington.

Greek Prime Minister George Papandreou, after meeting with Clinton at the State Department, told reporters that Greece is exploring ways within the European Union of improving Greece's borrowing prospects.

Clinton said, "Neither the prime minister nor Greece has asked the United States for anything."

Both officials said they discussed the need for major economies to make financial reforms and clamp down on speculators.

In an earlier speech, Papandreou decried currency manipulations by speculators and called for stricter global control of currency markets.

"It is common sense, enforced by insurance regulators, that a person is not allowed to buy fire insurance on his neighbor's house — and then burn it down to collect on that insurance," Papandreou said, comparing arsonists to speculators. "If Europe and America jointly step in to shore up global financial regulation — and to finally ensure enforcement of regulations — we can curtail such activities."

He encouraged U.S. authorities to continue investigations into possible currency manipulation involving the euro.

Papandreou plans to meet President Barack Obama on Tuesday.

The International Monetary Fund says the lending institution is also planning informal meetings with Greek Finance Minister George Papaconstantinou, who is accompanying Papandreou.

Papandreou emphasized that financial instability in Greece and Europe posed a threat to the United States.

"For America, a weak euro means a rising dollar. That, in turn, means a rising U.S. trade deficit," he said. "If the EU — still America's biggest trading partner — should falter, the consequences here would be palpable."

Papandreou has said his country is not looking for money from other governments, only help in securing loans at reasonable rates.

Papandreou's trip to Washington is part of a four-country tour seeking firmer EU and U.S. support for new austerity measures to rein in Greece's massive budget gap.

Greece has committed to a severe austerity plan to reduce its 12.7 percent budget deficit and has warned that going to the International Monetary Fund is an option if a European solution is not found.

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Greece urging US to better regulate hedge funds (AP)

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