Washington--The United States piled pressure on Greece Friday to agree to key reforms to obtain new EU financing, but equity markets sank in fear that Athens is headed for default.
Stepping into the latest European financial crisis, both President Barack Obama and Treasury Secretary Jacob Lew said Greece needs to reach a deal that will get it $7.2 billion euros ($7.8 billion) more in bailout financing from the European Union.
Lew warned in discussions with Eurogroup President and Netherlands Finance Minister Jeroen Dijsselbloem that no agreement between the two sides "would create immediate hardship for Greece, and uncertainties for Europe and the global economy more broadly," the Treasury said.
Lew told Dijsselbloem that "Time is of the essence for Greece to agree to a comprehensive set of reforms," the Treasury said.
Obama more directly called on Athens to accept the requirements that EU negotiators insist upon before releasing any more funds from the massive financial rescue program.
"Greece needs to initiate reforms," Obama said at a joint press conference with Italian Prime Minister Matteo Renzi at the White House.
"They have to collect taxes. They have to reduce their bureaucracy, (institute) more flexible labor practices," he said.
The comments came as the Greek debt drama drew heavy attention during the high-powered spring meetings of the International Monetary Fund and World Bank in Washington.
Greece is under pressure to reach a tentative deal with its creditors by the April 24 meeting in Riga, Latvia of the Eurogroup, the EU finance ministers.
But the country needs the added financing in place by early May when it has to make a huge debt repayment to the IMF, and after that to the European Central Bank.
If it cannot come up with the funds, fears are that a default could force it to quit the euro area, an unprecedented move that could spark more turmoil in financial markets.
Greek negotiators are to meet Saturday in Brussels with representatives of the European Union, the European Central Bank and the IMF to continue talks.
AFP
