He made his remarks Wednesday during an appearance at the Brookings Institution.
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“From the European side, there does need to be an understanding that for Greece to have a sustainable future the debt is in its current form unsustainable”, Lew said. Such an action would be, in his words, “geopolitically a mistake”.
An increasingly plausible Greek exit from the euro zone could trigger an even deeper financial and economic crisis in Greece.
Greek Prime minister Alexis Tsipras (L) and German Chancellor Angela Merkel meet at the European Union (EU) headquarters in Brussels on July 7, 2015 ahead of an emergency EU summit.
Over the past few weeks, Washington has indicated to European leaders that the structural reform package should be accompanied by a bailout of the Greek debt, something about which countries like Germany and the Netherlands have been more than wary.
Now Washington appears to be loosing patience, and Lew for the first time gave public advice on how Greece and its creditors could reach a deal.
In the words of Lew, there has been a ” deep reluctance” on the part of European players to change the debt terms for Greece into more realistic and favorable ones.
“Those kinds of things can be coordinated. We never said we were”, Lew said in a talk with Politico’s Ben White in New York. “Because that’s the space where I see the possibility of a resolution”. Greece on the other hand needs to provide credible promises and commitment, as the country is “near the verge of running out of money”.
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Lew, speaking at an event on USA financial stability, also said the United States was keeping a close eye on China’s stock market crash and that he hoped the market turmoil would not set back China’s economic reform agenda.
