Is President Obama right about Greece?
U.S. President Barack Obama offered some comfort to the embattled Greek population by hinting that the austerity drive may be tempered with other ways of restoring the economy to health.
Remarks made by the President following a meeting with Greek Prime Minister Antonis Samaras in the Oval Office Thursday suggested that the U.S. is moving towards a softer approach to Greece's rebuilding of its economy. Greece's GDP figures for the second quarter of the year are due on Monday, and are expected to show that the country's grim economic times are continuing.
(Read more: Is Greece on the right track after all?)
Obama said: "It's important that we have a plan for fiscal consolidation to manage the debt, but it's also important that growth and jobs are a focus."
Samaras, who is on a three-day trip to the U.S., pointed to the suffering of the Greek people under wide-ranging cuts to public services and public sector jobs. "We've gone through thick and thin," he told reporters." The sacrifices made by the Greek people are huge, but they're not going to be in vain."
He pointed to the problem of youth unemployment in the Mediterranean country, where around 65 percent of people aged 15-24 did not have a job at the end of May, according to the government statistics office.
The U.S. has contributed to the international bailout of Greece via the International Monetary Fund (IMF), part of the troika of lenders which has helped out Greece. Their help has come at the cost of imposing stringent debt reduction targets.
The U.S. is not the only prominent IMF member to suggest a change in tone towards Greece in recent weeks. Brazil's IMF representative abstained from a vote on Athens' aid package last week, and its finance minister Guido Mantega said the rescue program needed to be "revised and improved" to give Greece and other bailed-out euro zone countries a better chance of recovery.
(Read more: Greece gets green light for 4 billion euro payment)
Germany in particular is believed to be eager to keep the austerity flag flying.
"There's clearly this clash going on in the troika of how to handle Greece," Nick Malkoutzis, deputy editor of Greek newspaper Kathimerini, told CNBC.
"The Greek side was very pleased by this clear statement from President Obama that pursuing continual austerity to produce a primary surplus while not looking at the other side, be it debt relief or stimulus, is changing."
Further debt relief or stimulus might run the risk of delaying the changes needed to Greece economy, or mean that the heavily indebted country simply returns to its bad pre-crisis habits.
The European Central Bank, one of Greece's other troika members, is more interested in keeping the austerity message to the forefront, according to Giles Keating, head of research at Credit Suisse.
"Draghi's biggest worry is that the European governments have taken the political pain but will now think that the economy is recovering and they should stop this painful stuff. He wants to keep the negative tone," Keating told CNBC.
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