Washington: US Treasury Secretary Jacob Lew said Wednesday that Greece`s creditors need to give the country a path for debt sustainability and growth.
Speaking as the country faces a deadline Sunday for a new bailout deal with official European Union lenders, Lew backed the International Monetary Fund`s analysis that the key problem is that the country will never be able to pay its debts.
"I think the IMF has been very correct in focusing on debt sustainability. Greece`s debt is not sustainable," Lew said in a talk at the Brookings Institution think tank in Washington.
"I don`t think any PM of Greece could sell all of the additional fiscal measures plus the structural reforms that are needed without some sense of what the debt sustainability looks like."
While the Greeks need to convincingly commit to reforms, he said, the loans EU creditors have made to the country need to be restructured to go ahead.
"The reluctance to restructure European debt is deep on the part of many European players," Lew said.
"I think that in the next few days what we`ll see is, can the parties come together and build enough trust that Greece will take the actions that it needs to take, so that Europe will restructure the debt in a way that is more sustainable."
He called reaching a deal important for European economic and geopolitical stability and questioned why the two sides could not bridge their differences and avoid huge risks.
"Before things broke down and they went to a (Greek) referendum, they were within a couple billion euros of closing the gap. Hundreds of billions of risk, and a couple billion dollars of space," Lew said.
"For any of us who have participated in budget and fiscal policy discussions, you usually wouldn`t buy hundreds of billions of dollars of risk for a couple-billion-dollar gap."
With European officials having set a Sunday deadline for a bailout agreement, Lew warned that "it`s going to be a lot to do in a short period of time... The risk of an accident goes up dramatically when you create more of these life-and-death deadlines."
"What`s really driving things is, when do they run out of cash in their economy?... Once you are measuring it in days, it`s time to get the deal done."
