Lew urges Greece to speed up reforms

US Treasury secretary Jack Lew warned on Friday that a full-blown crisis in Greece would cast a new cloud of uncertainty over the European and global economies, as he put pressure on Athens to come forward urgently with detailed reforms to its economy.

Mr Lew said that while financial exposures to Greece had changed significantly since the turmoil of 2012, it was impossible to know how markets would respond to a default in the Mediterranean country.

"I do not think anyone can predict how markets will respond to dramatic changes in circumstance," he said following meetings with fellow finance ministers in Washington DC. "We have been clear in our conversations with all parties there is an urgent need to come together around a comprehensive approach."

Mr Lew said there had been inadequate progress in Greece's situation after weeks of discussions with eurozone partners and its lenders. Athens had to take a lead by coming forward with detailed proposals after going through budget measures line by line, adding that the situation would not be resolved by "speeches and rhetoric".

Asked if he agreed with the view that the global, systemic implications of a potential Greek default had diminished, he said "one ought not be sanguine that we know exactly what the response is".

His comments come amid mounting frustration among Greece's partners over lack of progress in sorting out its financial woes. Pierre Moscovici, the European commissioner for economic and financial affairs, has set the mid-May meeting of eurozone finance ministers as the "decisive" moment for Greece to agree a new set of economic reforms or face possible default.

In an interview with the Financial Times this week he called on Greece to "speed up" concrete technical discussions on a list of reforms it has submitted that, if agreed, would unlock the remaining €7.2bn loans from Greece's eurozone partners.

Without this funding, Greece is likely to run out of money and default either to the IMF in May or June, or to the European Central Bank later in the summer when large numbers of bonds held by the central bank mature.

Negotiators have expressed deep concern in Washington that Greece has not taken the technical talks seriously over the past few weeks and are in no mood to release the money without substantive progress.

Christine Lagarde, head of the International Monetary Fund, earlier this week said her advice was for Athens to take on the "tedious" technical work of designing reforms to the Greek economy and a credible implementation plan rather than hope for a grand political bargain.

Yanis Varoufakis, the Greek finance minister, delivered an impassioned speech to the Brookings think-tank on Thursday, saying that Greece was willing to give ground in its negotiations but that "we are going to compromise, compromise, compromise without being compromised".

Signing on the bottom line of the existing memorandum with lenders would be easy but the "wrong thing to do," the finance minister argued, saying he wanted to expunge the country's image as a "bottomless pit".

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