US’s Lew says Turkish turmoil strengthens Greece’s case for debt relief

US’s Lew says Turkish turmoil strengthens Greece’s case for debt relief

The visit to Athens on Thursday by US Treasury Secretary Jack Lew – particularly in light of his claims that the turmoil in neighboring Turkey strengthens Greece’s case for debt relief – is being viewed by the Greek government as an opportunity to highlight the significance of the country’s geostrategic position in its talks with creditors.

Washington has long argued in favor of lightening Greece’s debt load. And Lew’s comments, made public yesterday via an interview with the Financial Times, indicated that the upheaval that has followed a failed coup in Turkey consolidates the argument for offering greater support to Greece.

“I would hope [the recent regional upheaval] would change the climate in which discussions of debt relief happen, just because it’s the right thing to do on its own, and at a time when Greece is in a position [of] geopolitical significance that’s a good time to reinforce their fiscal future,” Lew told the FT.

Lew also noted that Greece’s pivotal role as a transit point for refugees heading towards Europe from Syria, Iraq and other strife-torn countries had led to a renewed focus on the country’s geopolitical significance.

“You have to fix the foundation to have a strong Greece,” he said, and called on the Greek government to become more proactive in implementing reforms demanded by the country’s creditors.

According to Greek government sources, Prime Minister Alexis Tsipras will refer to the May Eurogroup decision on the prospects for lightening Greece’s debt in his meeting with Lew on Thursday. He and Finance Minister Euclid Tsakalotos, who is due to meet Lew this morning, will both press for US support in overcoming potential objections by the notoriously tough International Monetary Fund to ensure that a second review of Greece’s bailout is completed in the fall without undue delays.

Sources close to Tsipras indicated that the premier welcomed Lew’s comments to the FT. The US official’s visit is being viewed more broadly as an opportunity to promote Greece as having a more significant role in the region.

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