US Treasury Secretary: Europe is courting disaster with the Greek debt crisis

REUTERS/Fabrizio Bensch U.S. Treasury Secretary Jacob Lew addresses a news conference at the G7 finance ministers and central bankers meeting in Dresden, Germany, May 29, 2015.

DRESDEN, Germany (AP) — Finance ministers from the Group of Seven wealthy democracies heard a sharp call from U.S. Treasury Secretary Jacob Lew to find agreement on more financial help for Greece.

Lew said that further delaying Europe's six-month old talks with Greece was "courting an accident" — such as a Greek default or messy exit from the euro, which could have unpredictable effects on the global and European economies.

Lew said Friday at the end of meetings in Dresden, Germany, that "too much time has been spent unproductively and the challenge is to treat this week as a week in which there has to be progress."

Greece faces large debt repayments in June on its bailout loans from the International Monetary Fund. Despite two bailouts totaling 240 billion euros from the IMF and other countries that use the euro currency, the country has not been able to repair its finances and economy enough to pay its bills.

It faces a large payment on June 5, one of

four due during the month.

Lew said that Greece needed "to make some tough decisions" on the economic reforms that are being asked in return for the money. "It has to be based on actions that Greece takes," Lew said. "I think that's the only way Greece will see what kind of flexibility they're able to get."

Finance ministers and central bankers from the Group of Seven, or G-7, on Friday were wrapping up three days of debate and discussion, where the official topic was not Greece but how to get the global recovery moving faster.

Officials wrestled over concerns that growth still faces risks ranging from low investment to lagging efforts to implement pro-business policies. They also talked about joint efforts to prevent multinational corporations from avoiding taxes.

Officials from host country Germany have emphasized that efforts to spur growth should not involve adding more debt through government budget deficits.

The G-7 countries are Britain, Canada, France, Germany, Japan, Italy, and the U.S. The group is an informal forum among leading economies for discussions of financial and security issues. Germany has the rotating presidency for this year's meeting.

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Source: www.businessinsider.com

Category: Bank

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