US: Greek deal failure would spur economic uncertainty

(WASHINGTON) - US Treasury Secretary Jacob Lew warned Friday that the European and global economies could face uncertainty if European Union negotiations on more financing for Greece fail.

In a meeting with Jeroen Dijsselbloem, the Netherlands finance minister and president of the Eurogroup of eurozone finance ministers, Lew "emphasized that time is of the essence for Greece to agree to a comprehensive set of reforms," the Treasury said in a statement.

Lew encouraged Dijsselbloem to "continue engagement toward a constructive outcome," and "underscored that not reaching agreement would create immediate hardship for Greece, and uncertainties for Europe and the global economy more broadly," it said.

The two officials were meeting on the sidelines of the spring meetings of the International Monetary Fund and the World Bank, where officials said Athens needs to commit to key reforms to obtain its last payment of bailout funds, 7.2 billion euros ($7.8 billion), to avoid defaulting on its debts.

Greece's leftist government has balked at implementing what it sees as more growth-sapping austerity policies, and so far has been unable to find a compromise with its EU-IMF creditors.

The eurozone country is under pressure to reach a tentative deal by the April 24 Eurogroup meeting and lock in financing before it has to make a major debt repayment to the IMF in early May.

Greek negotiators will meet Saturday in Brussels with representatives of the European Union, the European Central Bank and the IMF, plus the European Stability Mechanism.

Earlier US President Barack Obama also layered more pressure on Athens.

"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," Obama added.