U.S. Treasury Secretary Jacob J. Lew urged Greece and its international creditors to reach an agreement on steps that need to be taken to avoid the nation’s exit from the euro and any resulting crisis.
“There’s no doubt that if this leads to a crisis such as Greece leaving the euro zone, it will cause an enormous amount of disruption and hardship in Greece,” Lew said in an interview Wednesday. “Even if the contagion risk is much less now than it was, say, in 2012 and earlier, it would not be a good thing in a world economy just recovering from a deep recession to have that kind of uncertainty introduced.”
Lew will meet Friday with Greek Finance Minister Yanis Varoufakis during semiannual International Monetary Fund and World Bank meetings in Washington. Some European officials, including German Finance Minister Wolfgang Schaeuble, are skeptical whether there is enough time to work out a deal warranting a disbursement from the 240 billion-euro ($256 billion) international bailout.
Speaking about China’s planned Asian Infrastructure Investment Bank, Lew said he was encouraged by conversations he had with Chinese officials during last month’s trip to Beijing. Lew indicated that the U.S.’s resistance to joining may fade at some point, though the current question is whether China can ensure the bank operates in a way that enhances economic opportunities.
“We haven’t foreclosed any options for the future,” he said. “We’ve made clear to China and to the international financial institutions that we very much look forward to being able to collaborate.”
Lew reiterated his call for other economies to strengthen and said the strong dollar reflects the relative pace of expansion of the world’s largest economy compared with others.
“I certainly don’t want the U.S. economy to get weaker,” he said. “We have the good fortune of having the stronger economy. The other economies need to get stronger.”