US says all parties need to move on Greece

“All parties need to move,” Lew told a briefing after a meeting of Group of Seven finance ministers and central bank chiefs wrapped up in Dresden.  

After four months of negotiating to unlock some 7.2 billion euros ($7.9 billion) in bailout cash, Athens’ coffers are near empty and officials have indicated they might not be able to make a payment due next week, an event that might trigger a chain of events that could lead to a messy exit from the euro.

“There needs to be some flexibility on the part of the institutions,” namely the European Central Bank, the International Monetary Fund and the European Commission, Lew said.

The three, formerly known as the “Troika,” are demanding that the Greek government push through economic reforms in return for fresh bailout funds.

There was a “broad view” among the meeting participants that “Greece needs to make very tough decisions,” the US finance chief continued.  

But “one won’t happen without the other,” he insisted. Washington had “delivered the same message to all participants.”   

The radical left Syriza party of Prime Minister Alexis Tsipras that swept to power in January on an anti-austerity platform has been reluctant to sign up to more tax hikes and spending cuts.

“Everyone agrees that resolving this without crisis would be in interest of everyone and the global economy,” he said.

The finance ministers and central bank chiefs of the world’s seven wealthiest nations had met in the eastern German city to prepare for a wider summit of G-7 leaders starting on June 7.

And while Greece was not officially on the agenda, it was discussed because representatives of the key actors in the discussions - IMF chief Christine Lagarde, ECB president Mario Draghi and the EU’s commissioner for economic and monetary affairs Pierre Moscovici - all attended.    
 
Lagarde had caused a flurry the day before by saying in a newspaper interview that a so-called “Grexit” - or Greek exit from the eurozone - was “a potential.”   

The IMF subsequently scrambled to clarify her comments by saying Lagarde hoped it was a scenario “the Europeans will not have to face because hopefully they will find a path to agree with the future of Greece within the eurozone.”   

French Finance Minister Michel Sapin insisted: “There is no Grexit scenario.”  

There had been “progress” in the negotiations, but “results are still insufficient so far,” Sapin said.

The meeting’s host, German Finance Minister Wolfgang Schaeuble, also sought to play down assertions by Athens that Greece is on the verge of reaching a deal with its creditors.

“The positive reports out of Athens don’t fully reflect the state of talks,” Schaeuble said.  
 
The Greek government has sent mixed signals about how close the two sides are to a deal. On the one hand it has suggested that an agreement could be reached by May 31.

But Finance Minister Yanis Varoufakis told VimaFM radio on May 29 said that while a deal was close, under a February agreement “the country’s aid programme was prolonged until June 30, thus that is the date by which we need to arrive at a deal.”