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White House urges Greece to reach agreement on bailout terms with the EU

The US administration has urged Greece to move quickly with negotiations and reach an agreement with the EU on terms for its bailout. A failure could lead to a crisis in the world economy.

The Obama administration on Friday requested Athens to speed up negotiations on terms for its bailout agreement, with President Obama saying that Greece would also have to initiate change.

"Greece needs to initiate reforms. They have to collect taxes. They have to reduce their bureaucracy. They have to have more flexible labor practices," German press agency dpa reported Obama as saying. He was speaking at a White House press conference with Italian Prime Minister Matteo Renzi.

Separately, the US Treasury Secretary Jack Lew said in a statement that Greece needed to quickly negotiate with the International Monetary Fund (IMF) and the European Union (EU) and that a failure to do so would threaten the global economy.

"We urge the [Greek] authorities to quickly and fully commit to technical negotiations with their international partners," Lew said at an IMF steering committee meeting on Friday in Washington.

"Not reaching an agreement would create immediate hardship for Greece and uncertainties for Europe and the global economy more broadly," Lew added.

Tough road ahead

Experts say the country could face a debt default this month if it does not submit a detailed list of reforms that satisfies its debtors enough to make them unlock 7.2 billion euros ($ 7.6 billion)- the last tranche of the 240-billion-euro bailout.

Greece's Finance Minister Yanis Varoufakis recently refused an agreement on his country's debt deal as far as it was linked with unreachable economic targets. Varoufakis and Greek Prime Minister Alexis Tsipras' Syriza party came to power recently amid promises to undo harsh austerity measures the previous government had implemented.

Responding to Syriza's concerns, Obama said on Friday that his government recognized the "need to show your people there's hope and that you can grow, and we will be supportive of some flexibilities in how you move forward so you can make investments."

However, Greece needed to show some "flexibility in meeting fiscal targets," the president added.

Prospective deal with Russia

The financially challenged state could also be signing an oil pipeline deal with Russia next week, in a bid to delay its impending bankruptcy. According to reports in the German magazine Spiegel's online version, the deal could bring in between three and five billion euros for Athens in the beginning.

The money is meant as an advance for profits from the Turkish Stream oil pipeline, which will bring gas from Russia through Turkey and Greece starting 2019.

Spiegel quoted a high-ranking Syriza official as saying that the deal could "turn the tide" for the country. Greek finance weekly Agora reported that the government "hoped to receive the necessary financial aid from the Kremlin and thus delay talks with its European partners until June," the magazine reported.

mg/bw (dpa, Reuters)

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