U.S. Treasury’s Nathan Sheets does Athens: Now what?

U.S. Treasury’s Nathan Sheets does Athens: Now what?


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U.S. Treasury Under Secretary for International Affairs Nathan Sheets stopped in Athens May 11 and met with Prime Minister Alexis Tsipras and Finance Minister Euclides Tsakalotos.  The visit is part of a three-country swing that includes Italy, France and Greece and received very light press coverage in an Athens currently swirling with property-ownership scandals and government reshuffle rumors.  This was Sheets’ first Athens visit.   The Greek government is deeply engaged in rush preparations for additional reform legislation to be submitted for a vote next week in order to compete the First Greek Program Review by May 24 and unlock an urgently-needed bailout tranche.

New Europe understands the planning for this visit had started many months ago, when the need for direct U.S. engagement appeared more urgent.

There have been some interesting modifications to the standard American official references to the need for some form of debt relief involving Greece, even though the U.S.  is not a bailout creditor except via the IMF.   In the last few months, the Treasury Department has started inserting the word “meaningful” before “debt relief,” a change particularly important to Athens, but it is not clear whether this new formulation was actually requested by Greek officials.  Here is the relevant segment of the US Treasury Department’s trip announcement:

“On May 11 in Athens, Under Secretary Sheets will meet with government officials and private sector participants to discuss the latest developments in concluding the first review of Greece’s reform program and the state of play in discussions with Europe for meaningful debt relief.”

Observers should note the relatively high level of activity by the U.S. Treasury Department regarding bringing the First Greek Program Review to closure, which could conceivably happen this month if the Greek side is able to deliver fully on its long-delayed structural reform obligations (recalling the original October 2015 target date).  To recap briefly, since many Greece-watchers had focused on the refugee crisis through the spring, we have seen official announcements of four American Cabinet-level contacts with Greek officials over the last three months on the subject of the dragging First Program Review.  Treasury Secretary Lew called PM Tsipras on February 27 and again on April 28, to urge speedy closure of the review, and met with Finance Minister Tsakalotos April 15 during the IMF Spring Meeting in Washington.  Vice President Biden called PM Tsipras April 4, ostensibly linked to the White House’s (delayed) celebration of Greek National day, and the delayed First Program Review again came up.

In late April we also saw a small dust up on Capitol Hill involving Treasury’s Under Secretary Sheets, where the question of Greek debt sustainability and the IMF’s role came up in a hearing (reported in New Europe).  This created some confusion in the media, and the U.S. Ambassador in Athens issued a press release to clarify the U.S. position on Greek reforms, the IMF and debt issues on April 28.

From this author’s perspective, we are seeing a steady and somewhat unusual barrage of public announcements detailing continuing U.S. engagement in the crisis.  It is unusual because the actual U.S. role in the Troika/Quartet decision process on Greece is minimal; therefore most of these announcements fit in the category of “spin.”  Has Washington moved somewhat off of its declared “honest broker” position?  Clearly one can argue that this Washington “spin” was intended to underscore strong U.S. support for Greece and possibly boost PM Tsipras’ confidence in closing a tough deal, but who actually knows if the European creditors, also very close American allies, took offense at the perceived negative U.S. tilt vis-a-vis their extensive efforts to finalize the Program Review and the critical reforms therein.  What of the IMF role in all of this? Time will tell, and possibly WikiLeaks will help fill in the blanks.

 

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