Lew backs debt relief, robust Greek role in region

Amid the unrest in the Middle East and the political turmoil in Turkey, Athens’s bid to entrench itself as an anchor of stability in the wider region received a boost on Thursday from visiting US Treasury Secretary Jacob Lew, who stressed the importance of making Greece’s debt sustainable in order to bolster the country’s geopolitical significance.

“The sooner these issues [with Greek debt] are resolved the better… My view of the geopolitical significance of Greece is not new," said Lew, who made a stop in Athens on Thursday for talks with Finance Minister Euclid Tsakalotos, Prime Minister Alexis Tsipras and leading banking officials on his way to China for a meeting of G20 finance ministers and bank governors.

Debt restructuring, he said, was crucial for the country’s economic future.

“Our position has been clear for quite some time,” Lew said, arguing that achieving debt sustainability and stability were key to long-term economic growth.

“I encourage all parties to be flexible to successfully conclude this fall’s negotiations," he said.

Lew also expressed hope that the debt issue is resolved before US President Barack Obama leaves office and praised Greece for the progress it has made in implementing reforms, which, however, he said, must continue so as to persuade eurozone and IMF creditors to open debt relief talks.

“Completing the work, continuing to implement privatization, doing the work that’s needed to address the non-performing loans will very much strengthen the position that Greece brings in to a negotiation in the coming months,” Lew said.

Tsipras said that it was more important than ever now for Greece’s partners to show solidarity so that it can pick itself up and play an even stronger role as a bastion of stability in a region beset by instability.

“Now is the right time to send the right messages to investors and markets with substantial measures for significant debt relief so that we can support the economy and strengthen Greece’s role as a pillar of stability in a volatile region,” Tsipras said welcoming Lew.

Lew did not take a stance on whether Greece’s primary budget surpluses should be reduced – a key demand of the leftist-led coalition – deferring the subject to the discussions between Athens and its international creditors.

But he was clear that the IMF – which has long called for debt restructuring – should be part of the discussions about the Greek bailout program.