The White House is pushing for a compromise between Greece and its creditors in Europe on concerns that the country's exit from the European Union will cause more than just economic problems in the region
According to a Reuters report, U.S. Treasury Secretary Jack Lew said that the failure to resolve Greece's debt crisis and its subsequent exit from Europe's monetary union would be a geopolitical mistake that would lead to a lot of uncertainty in the region.
The report noted that it was the first time that a ranking Obama administration official that the White House sees Greece's exit from the EU as having an impact on U.S. interests in the region.
Lew warned that failing to reach a deal on the issue would cause billions of economic damage worldwide, which is why it is very important for Greece and its creditors to agree on a compromise. He, however, said the Greek crisis does not have an immediate threat to the U.S. economy, the Financial Times reported.
The paper added that the U.S. government has been lobbying its European allies to extend debt relief to Greece. U.S. President Barack Obama had talked to Greece Prime Minister Alexis Tsipras and German Chancellor Angela Merkel on Tuesday to discuss the issue.
Greece, led by Prime Minister Alexis Tsipras, is pushing for a restructuring of debt with its creditors after its citizens overwhelmingly supported rejecting additional loans tied to further austerity measures. Greece, which has already raised taxes and cut pension payments, is fearful that additional belt-tightening would prevent its economy from recovering and raise funds needed to pay its debts.
The bulk of Greece's debts are owed to European Governments, the European Central Bank and the International Monetary Fund. Last week , it missed a payment to the IMF, becoming the first developed country to default. An IMF report on the Greek crisis showed that the multilateral lender believes the country's debts need to be restructured.
