Thursday, July 18, 2024
 
 

Jack Lew does Athens and urges continued reform, but promises nothing on debt

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As promised by President Obama in Warsaw earlier this month, Treasury Secretary Jack Lew concluded his post-Brexit vote European consultations and visited Athens for 7 hours July 21, en route to the G20 summit in China.
The visit included meetings with Finance Minister Tsakalotos and the obligatory press conference, a meeting with Economy Minister George Stathakis, a meeting with PM Alexis Tsipras, and a meeting with opposition leader Kyriakos Mitsotakis of the New Democracy party, currently substantially ahead of PM Tsipras’ Syriza party in most local election polls.
The core of the Lew visit appears to have been a fairly routine meeting between Finance Ministers as both sides have been in constant contact up to and since the summer 2015 Greece bailout extension agreement.   The press conference’s focus was the standard case of the local journalists attempting to draw Secretary Lew out on what the U.S. would be willing to do with Greece’s European creditors and the IMF  to underscore the need for urgent debt restructuring action now.  Secretary Lew basically explained that he would spread the word that Greece is moving forward with essential structural reforms and thus its debt restructuring requests deserve to be taken seriously.  Secretary Lew expressed broad understanding for the hard reform work already done but noted more work will be needed to move things onto a strong positive trajectory, stating that Greece had to “make headway on the next set of milestones due in October (the second program review) including by following through on privatization plans and moving forward with critical financial sector reforms.”
Thankfully, Secretary Lew’s visit organizers understood the importance of scheduling a meeting with the head of the main opposition party, as well as the symbolic political significance of meeting with the opposition at a time when it is well ahead in the opinion polls.  Since Mr. Mitsotakis is U.S. -educated, it also gave Secretary Lew a chance to discuss economic policy with somebody who could present a strong pro-reform and pro-investment perspective.
This is not Secretary Lew’s first meeting with PM Tsipras and they have had a number of long telephone conversations at crucial junctures in Greece’s negotiations with its Troika of creditors.  What PM Tsipras wanted most from his meeting with Secretary Lew was an expression of Greece’s increased strategic significance since the Turkish coup, and an expression of continuing U.S. support on the debt question and other issues.  Few in Greece actually expect the U.S. will be able to sway Greece’s creditors to move in the direction of debt forgiveness, but there is hope that Europe will show increased willingness to clarify how much it will be able to do before another round of formal discussions in 2018.
 
 

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CEO/Editor-in-Chief.  Former US diplomat with previous assignments in Eastern Europe, the UN, SE Asia, Greece, across the Balkans, as well as Washington DC.

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