Obama administration urges Europe to avoid a Greek meltdown

The Obama administration warned Europe on Wednesday that allowing a financial and economic meltdown in Greece would be a geopolitical mistake.

U.S. Treasury Secretary Jack Lew said he has been in constant contact with European officials regarding a Greek debt crisis that threatens to lead Athens to exit the euro zone and increase hardship for the Greek people.

"There's a lot of unknowns if this goes to a place that completely melts down in Greece," Lew said. "I think that unknown is a risk to the European and global economy … I think it's geopolitically a mistake."

Lew, speaking at an event on U.S. 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.

He said the incident raised questions about how quickly China's economy will grow over the long term.

In comments on U.S. financial regulation, Lew said an soon-to-be-released analysis by U.S. regulators showed that a raft of new regulations written after the 2007-09 financial crisis did not cause the extreme volatility of bond markets on Oct. 15.

[Reuters]