Treasury Secretary Jack Lew, prior to the weekend G-20 meeting in Moscow and his visit to Athens Sunday, told Bloomberg TV that Greece has “difficult decisions ahead.”
“I think it’s clear that Greece has moved in a very important direction in making reforms that they needed to make,” he told Bloomberg Television in an interview broadcast late Thursday.
Lew did not say what his Athens visit with the prime minister and his counterpart finance minister is supposed to accomplish and said Greece is not primarily a U.S. concern. “It is obviously primarily a European challenge,” he said. “But we have stayed in close contact with the Greek government throughout and I think it’s important that we continue that conversation.”
President Barack Obama will be meeting with top Greece officials next month.
On the G-20 meeting, Lew said he will once again deliver the U.S. message he has carried to any international gathering, that growth should be the top global priority.
“We’ve been making the point at these meetings that Europe does need to look at what it can do to get the engine of growth moving again,” Lew said. “The world needs Europe to grow.”
On China and some other emerging economies, “They need to go through the internal reforms to get their economy moving. These have been friendly conversations.”
The U.S. economy, Lew said, is “growing in the neighborhood of 2% right now. It looks like it might be growing a little faster at the end of the year” after weathering the “tremendous headwinds” of a payroll tax cut that was eliminated and spending cuts with the sequestration.
“If you look at Europe, 2% is far beyond their expectations,” he said.
On Treasury’s debt limit that will have to be raised to avoid default near the end of the year and the budget for the next fiscal year, Lew said, “We look forward to finding reasonable people to engage with who care about making sure we have a strong economy in the future.”
He repeated, “We need that engagement, and we need it in the context of fiscal policy, but not in negotiating over the debt limit.”
On the future of Fannie Mae and Freddie Mac, Lew said it must make sure “the American taxpayer is never left on the hook for an unbounded risk if there was another problem in the future.” The Senate proposal is bipartisan, he said, and the House version is not. “This is going to require a bipartisan solution, and we look forward to being part of it.”
On reform of banking and financial services in general, “the rest of the world’s catching up to the United States.” It is “sensible,” he said, to increase the leverage ratio for banks in the United States above the minimum set in the Basel III accords. “We’re going to get to the level where institutions have to bear the burden of their own risk and have to have the capital in place to do that.”