FT: Turkish Turmoil Could Help Greece Get Debt Relief



GREECE-DEBT

An article in the Financial Times makes a case for the current turmoil in Turkey being of benefit to Greece. U.S. Treasury Secretary Jack Lew has said that Greece’s creditors should let Greece restructure its debt so that the country can play a role as an anchor of regional stability in the region. In an interview with the Financial Times, Lew used the failed coup in Turkey to add weight to the United States argument for debt relief for Greece.

Lew said that Greece should be allowed to restructure its debt as part of a broader plan to put its dire economy on a solid footing. “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,” he said.

Lew cast the focus on Greece’s geopolitical significance as a transit point for refugees surging into Europe from Syria, Iraq and elsewhere. “You have to fix the foundation to have a strong Greece,” he said, however, he called on Greece to implement reforms alongside debt restructuring.

The interview with the Financial Times came ahead of his visit to Greece where he will meet with Prime Minister Alexis Tsipras. Lew reiterated the view  of the International Monetary Fund on debt restructuring that is necessary so that the Greek debt is sustainable. Lew expressed that everyone has agreed, at least in principle, that debt restructuring would not reduce the amount repaid by creditors. “It is critical for all parties to look at this in a pragmatic way, in a flexible way and in an amicable way. There is clamor for certainty. The only certainty that can happen in the very short term is the mode of engagement,” he said.