Newspaper article International New York Times

Lew Stresses Urgent Need for Deal on Greek Debt ; as June Deadlines Loom, Athens and Creditors Are Still Said to Be Far Apart

Newspaper article International New York Times

Lew Stresses Urgent Need for Deal on Greek Debt ; as June Deadlines Loom, Athens and Creditors Are Still Said to Be Far Apart

Article excerpt

The secretary of the U.S. Treasury said after Group of 7 meetings that risks persisted if Greece and its eurozone partners failed to reach an agreement soon.

The United States Treasury secretary on Friday once again warned eurozone countries that they should not delay reaching a deal on further aid for Greece, amid a growing sense that negotiations were moving too slowly to avoid the country's disorderly exit from the eurozone, with repercussions for the global economy.

Jacob J. Lew, the Treasury secretary, has used meetings of Group of 7 finance officials and central bankers here this past week to push for faster action for Greece. He repeated that message on Friday as the meetings concluded, warning of the risks if Greece and its eurozone partners do not reach an agreement soon.

"What we know for sure is that you keep raising the risk of an accident if you put off the action until whenever the next deadline is," Mr. Lew said at a news conference.

Greece was not officially on the agenda during the Dresden meetings, which dealt with ways to increase economic growth, improve regulation of banks and prevent tax evasion by large international corporations. But Mr. Lew said there were "quite a number" of informal discussions about Greece, and its need to agree on terms to receive further aid from other eurozone countries.

Wolfgang Schauble, the German finance minister, played down the significance of Greece at the G-7 meeting.

"Despite the expectations of the media, we talked about our agenda, and Greece was not on the agenda," Mr. Schauble said at a separate news conference. "We are aware of our responsibility, and we will do everything to fulfill it."

Absent a last-minute deal with its creditors, Greece is expected to run out of money by the end of next month. The government must make more than 1.5 billion euros, or about $1.6 billion, in payments to the International Monetary Fund in June, with the first, for about EUR 300 million, due on June 5.

Officials in Dresden implied that Greece would be able to make the payment on June 5, or delay it in a way that would not constitute a default. But the existing aid package for Greece will expire at the end of June, a deadline that would be harder to finesse.

"This date emerges as a new, crucial watershed not only because the current extension deal expires on that date," Wolfango Piccoli, managing director of Teneo Intelligence, a consultancy, wrote in a note to clients. "The political appetite for once more extending the current extension is extremely limited in skeptical creditor countries, especially Finland and Germany."

Christine Lagarde, the managing director of the I.M.F., left the G-7 meeting on Friday without commenting publicly on Greece. …

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