U.S.'s Lew urges Greece to stay on budget reform path

[July 21, 2016] By David Lawder and George Georgiopoulos

ATHENS (Reuters) - U.S. Treasury Secretary Jack Lew on Thursday urged Greek officials to make more progress on budget and economic reforms to help unlock European debt relief and boost growth in the struggling Greek economy.

Following a meeting with Greek Finance Minister Euclid Tsakalotos in Athens, Lew said Greece needed "to make headway on the next set of milestones due in October, including by following through on privatisation plans and moving forward with critical financial sector reforms."

He told a news conference there were multiple ways to make Greece's debt more sustainable, including easing its primary budget surplus target of 3.5 percent of gross domestic product in 2018. Although the International Monetary Fund has said this target is too high and cannot realistically be achieved, Lew said it was up to Greece and its lenders to reach a formula that is sustainable.

"In the end, it has to work," he said.

Lew said reform progress was important so that European leaders can begin discussing with the IMF the timing and details of Greek debt relief, which Eurogroup lenders committed to pursuing in May.

"Putting Greece's debt on a sustainable path is critical to Greece's long-term economic health and I encourage all parties to be flexible to successfully conclude this fall's negotiations," Lew said.

(Reporting by David Lawder and George Georgiopoulos; Editing by Catherine Evans)

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