A Greek exit from the Euro Zone would have a major impact on the country’s moribund economy and its people, US Treasury Secretary Jacob Lew warned.
European Union heads are waiting for the anti-austerity government in Athens to present new economic reform and budget proposals, as Greece and its EU-IMF creditors struggle to reach a debt deal to prevent a default that could have worldwide repercussions.
“I’m not going to predict what the consequences would be,” Lew said in an interview with CNN, asked what would happen in the event of a “Grexit.”
“It’s clear that within Greece the consequence of a failure here would mean a terrible, terrible decline in their economic performance. It will hurt the Greek people, who will bear the first brunt of a failure.”
Lew said all parties in the fractious ongoing talks needed to show flexibility, ahead of an emergency summit of leaders of the 19 countries in the euro area tomorrow in Brussels.
“The reality is that there are impacts on markets. And I don’t think anyone should want to find out,” he said of the prospect of Greece leaving the Euro zone.
“I urge all the parties to be flexible but I think that we’re at a moment now where the burden is on Greece to come back with a response that’s the basis for reaching an agreement as soon as possible.”