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U.S. Warns Against World Economy Effects of Potential Greek Default

F041306PM-0035.JPGThe United States through Treasury Secretary Jack Lew warned on Friday of a possible negative effect for the world economy if Greece and its creditors miss their deadline to avert a debt default.

As the deadlock in negotiations between Greece and its international creditors continues, Athens has difficulty making loan repayments to the International Monetary Fund due next week. The issue of Greece was discussed at the Group of Seven industrial nations meeting that took place in Dresden this week.

U.S. Treasury Secretary Jack Lew repeated warnings that European creditors and the IMF should not underestimate the risk of a Grexit that may generate instability in global economy.

“There is great uncertainty in here at a time when the world needs greater stability and certainty,” Mr. Lew told reporters.

On June 30, Greece’s bailout expires, meaning that there won’t be a disbursement of funds available to it after that date. German Finance Minister Wolfgang Schaeuble said on Friday that this is the deadline for Greece to complete the fifth review of its bailout program.

Mr. Lew said time was precious. “If you look from January until now, too much time has been spent unproductively,” he said.

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