US Treasury Secretary Greece to reach debt deal to avert immediate hardship

By Andrew Mayeda

US Treasury Secretary Jacob J. Lew urged Greece to reach a deal with international creditors, warning that failure to do so would bring immediate hardship to Europe?s most indebted-state.

Lew encouraged Greece to find a constructive path forward in partnership with Europe, the Treasury Department said in a statement after a call Wednesday between Lew and Greek Finance Minister Yanis Varoufakis.

Greece will submit a request for a six-month loan extension to the euro area Thursday, a day later than originally planned, according to a government official. Failure to strike a compromise would leave Greece without a financial backstop, and on course to default on some of its liabilities as early as next month.

The Treasury secretary told Varoufakis that the U.S. will remain engaged with all parties in the coming days to encourage progress in the debt discussions, according to the statement.

Greece has been locked in a standoff over bailout funds with the European Central Bank, European Commission and International Monetary Fund, also known as the troika. Greece and euro-area members have been at odds over the formula needed to extend the country?s 240 billion-euro ($273 billion) rescue beyond its expiration at the end of February.

The call on Wednesday followed one on Feb. 13 between Lew and Greek Prime Minister Alexis Tsipras, where Lew urged all parties to aside rhetoric and focus on a pragmatic solution, according to the Treasury.

[Bloomberg]