Panic in Lew of Greek Solution

Speaking at the London School of Economics (LSE) en route to the G7 meeting in Germany, U.S. Treasury Secretary Jack Lew called for a quick deal on Greece. Asked whether he is optimistic about an agreement on Greece, he said he tries to be, but added that the situation must be resolved quickly. To put it mildly, Lew is totally flipped out over the prospects of a worse-than-2008 systemic blowout that could easily be triggered by a collapse of the talks and a Greek default on its June 5 payment to the IMF.

While Lew tried to appear calm, using bankers language, the message of panic was perfectly clear:

“Brinksmanship is a dangerous thing when it only takes one accident. Everyone has to double down, and treat the next deadline as the last deadline and get this resolved. The risk of going from deadline to deadline only increases the risks of an accident,”

he said, indicating that he was sure Greece will be a key topic at the G7 meeting.

According to the Guardian, Lew said the Greek situation is more stable than in 2012, because more of its debt is owned by sovereigns, but was quick to say,

“No one should have a false sense of confidence that they know what the result of a crisis in Greece would be. It would not be a good thing to see an economy in crisis; a run on Greece’s banks, which would leave people in other countries wondering what would happen if they hit a difficult moment. It is in everyone’s interest that this is resolved…

Greece must come up with a package of credible economic reforms, to deal with fiscal challenges and provide structural reforms. And if it does that, the challenge for the Europeans and the IMF is to show enough flexibility to help resolve the situation safely.”

This morning, Lew also spoke by telephone with Greek Prime Minister Alexis Tsipras, in which he repeated the same points made at the LSE. According to a Treasury Department statement, Lew told Tsipras that he “continues to monitor the evolving situation in Greece closely,” and remains engaged with all parties involved in the talks, and “continues to urge all parties to find common ground and reach an agreement quickly.” He said failure to reach an agreement would cause “immediate hardship for Greece and broad uncertainties for Europe and the global economy.”

Now there are rumors flying that a “deal” could be signed very soon. Of course the real issue is the debt—will it be paid, or cut? This, no one is discussing.

VATICAN CALLS FOR SOLUTION

Vatican Secretary of State Pietro Parolin called for a quick solution to the EU-Greece negotiations.

Asked by Vatican Radio about the negotiations between Greece and the IMF, ECB, and EU Commission, creditor institutions formerly known as the “Troika,” and the “risk of a destabilization for the entire continent,” Parolin answered:
“It is a situation that could, indeed, lead to a certain destabilization. Therefore, we wish that they reach an agreement, a solution, as soon as possible.”

Although mainstream media interpreted Parolin’s statement as “pro-IMF,” another Vatican official made it clear that the Vatican backs the Greek government and the Greek people. Msgr. Silvano Maria Tomasi, permanent Vatican observer at the UN in Geneva, told Vatican Radio:

“Of course, a fundamental aspect of the human being is also of feeling solidarity with others because it is part of what we are: If we start from this premise, solidarity becomes also a political strategy, leading to operational and practical consequences which are beneficial for everyone. Therefore, if we have a country with problems, we don’t protect us by isolating it; we protect us by participating in the problems of the crisis-ridden country and helping it to solve them.”

Panic in Lew of Greek Solution

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