Governor Arnold Schwarzenegger has compared his state’s financial crisis to that of Greece and called for scrapping the state welfare system to close a $19.1 billion budget gap.

He said the US state, with an economy that ranks as the eighth largest in the world, faced the same budget deficit crisis as eurozone countries such as Greece, Spain and Ireland.

California’s government has been forced to cut $12.4 bn in spending over the remainder of this fiscal year and the next, Schwarzenegger revealed yesterday.

He said: “You see what is happening in Greece, you see what is happening in Ireland, you see what is happening in Spain now. We are left with nothing but tough choices.”