Jacob Lew, Treasury secretary, presses for deal as Greece talks climax

As political tensions ratcheted up across the Atlantic, Treasury Secretary Jacob Lew urged European negotiators to solve Greece’s financial crisis, saying Athens’ debt was unsustainable at current levels and the country needed at least some relief to keep from abandoning the euro altogether.

At the same time, Greek Finance Minister Euclid Tsakalotos formally requested a three-year loan from the eurozone bailout fund, the European Stability Mechanism (ESM). The Greek government has until Sunday to reach an agreement with its creditors.

“In the next few days, what we’ll see is, can the parties come together to 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?” Mr. Lew said during a discussion at the Brookings Institution Wednesday.

He added, “It’s a lot to do in a short period of time, and I’ve said over and over again that the risk of an accident goes up dramatically when you create more of these kind of life-and-death deadlines.”

Prime Minister Alexis Tsipras also spoke to the European Parliament in France on Wednesday, urging members to accept his government’s loan proposal. He said there was a “light at the end of the tunnel” and that Europe and the rest of the world could avert a potentially devastating Greek exit from the euro. He also hinted at massive tax and pension reforms, but said the specifics of the loan plan would be outlined on Thursday.

“We are determined not to have a clash with Europe, but to tackle head-on the establishment in our own country and to change the mindset which will take us and the eurozone down,” Mr. Tsipras said.

While President Obama and key European officials support what would be the third bailout for Greece in the last five years, German Chancellor Angela Merkel has taken a tough line against any further concessions.

“We still do not have the basis for negotiations” for a new bailout program, Ms. Merkel said, as negotiators in Brussels made a last-ditch effort to finalize a deal that would prevent the collapse of the Greek economy and help restructure the country’s debt.

On June 30, Greece defaulted on a $1.8 billion payment to the International Monetary Fund (IMF), the Washington-based financial monitoring group that had been lending money to Greece since 2010. On Sunday, over 60 percent of Greek voters gave a resounding no to the latest EU offer, with many citing years of stalled progress and a desire for economic independence as reasons to oppose the proposed bailout terms.