WASHINGTON (Sputnik) — The US president added if Europe’s economy slows down it could have a “dampening effect” on the world economy.
“This [Greek crisis] is not something we believe will have a major shock to the system. Obviously, it is very painful for the Greek people and can have a significant effect on growth rates in Europe,” Obama said.
The United States, European Central Bank (ECB) and international financial institutions need to develop a contingency plan to ensure financial markets are able to handle a Greek default, Obama said.
Greece, the International Monetary Fund (IMF) and ECB have been in back-and-forth negotiations to implement reforms and provide additional funding to avoid a Greek default and potential exit from the Eurozone.
As a Tuesday night $1.7-billion repayment to the IMF looms, Athens and creditors remain in a deadlock. Greek Finance Minister Yanis Varoufakis said on Tuesday that Greece would not make the IMF payment.