U.S. urges Europe, IMF to reach a deal to keep Greece in euro zone

 WASHINGTON | BY SARAH N. LYNCH AND DAVID MORGAN

U.S. Treasury Secretary Jack Lew toasts at a joint banquet at U.S.-China Strategic and Economic Dialogue (S&ED) at the State Department in Washington June 23, 2015.

REUTERS/YURI GRIPAS

Top U.S. officials waded in at the weekend to try to help resolve Greece's financial woes, urging Europe and the International Monetary Fund to come up with a recovery plan that keeps the country in the euro zone.

In a series of separate phone calls on Saturday to IMF Managing Director Christine Lagarde and the finance ministers of Germany and France, Treasury Secretary Jack Lew urged them to "find a sustainable solution that puts Greece on a path toward reform and recovery within the Eurozone," according to a Treasury Department statement on Sunday about the calls.

Lew noted it is "important for all parties to continue to work to reach a solution, including a discussion of potential debt relief for Greece," in the run-up to a planned July 5 referendum in Greece on the terms of a bailout, said the statement, provided by a spokesperson.

Greece is facing a looming Tuesday deadline on a 1.6 billion euro payment due to the IMF. Earlier Sunday, Greece announced it will impose capital controls and keep its banks shut on Monday, after international creditors refused to extend the country's bailout.

Lew also underscored the need for Greece to adopt "difficult measures to reach a pragmatic compromise with its creditors," the Treasury statement said.

The Treasury spokesperson said senior department officials have also been in regulator communication with Greece and that Lew had spoken to Prime Minister Alexis Tsipras "multiple times" over the past two weeks.

The department has urged Greece to work closely with its international partners on planning for a bank holiday and capital controls, the spokesperson said.

President Barack Obama spoke with German Chancellor Angela Merkel on Sunday about the Greek situation.

"The two leaders agreed that it was critically important to make every effort to return to a path that will allow Greece to resume reforms and growth within the Eurozone," a White House statement said.

"The leaders affirmed that their respective economic teams are carefully monitoring the situation and will remain in close touch."

(Reporting by Sarah N. Lynch and David Morgan; Editing by Frances Kerry)