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Greece appeals to US to rein in speculation on struggling euro

Prime Minister of Greece George Papandreou gives a press conference in Washington with US Secretary of State Hillary Clinton.
Prime Minister of Greece George Papandreou gives a press conference in Washington with US Secretary of State Hillary Clinton. Reuters

Greece's Prime Minister George Papandreou held talks with United States President Barack Obama in Washington on Tuesday, after the Greek premier raised concerns that US speculators are undermining efforts to overcome his country's financial crisis. Currency traders are reported to have placed major bets that Greece will default on its debts.

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"Unprincipled speculators are making billions every day by betting on a Greek default," Papandreou said on Monday.

Reports say hedge funds have placed large bets against the euro, which is used by Greece and 15 other European states.

But Papandreou warned that the repercussions of any coordinated speculative attacks on the euro would be detrimental to the United States.

"That is why Europe and America must say 'enough is enough' to those speculators who only place value on immediate returns, with utter disregard for the consequences on the larger economic system - not to mention the human consequences of lost jobs, foreclosed homes, and decimated pensions," he said.

The euro fell against the dollar in European trading on Tuesday as investors awaited fresh details of Greece's plans to resolve its debt crisis.

Papandreou arrived in Washington after visits to France and Germany to seek international support for his heavily indebted nation.

But unlike his meetings with fellow EU leaders, Papandreou's talks in Washington are not expected to touch on the possibility of financial aid for Greece.

"Neither the Prime Minister nor Greece has asked the United States for anything," Secretary of State Hillary Clinton said after talks with Papandreou on Monday, adding that the two countries are instead set to cooperate on toughening financial legislation.

Papandreou's meeting with Obama comes as the European Commission prepares to float proposals to create a so-called "European IMF" that could rescue struggling eurozone countries such as Greece.

But a future EMF, while an "interesting idea" is not currently an "absolute priority", French Finance Minister Christine Lagarde said Tuesday.

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