Matthew Lynn, former chief executive of Strategy Economics, a London-based consultancy and author of 'Greece, the Euro and the Sovereign Debt Crisis', says the US is more interested in using its influence to retain Greece within the Eurozone for geopolitical reasons than financial ones, as it seeks to broker a deal with other member of the G7 group of countries in Brussels on Thursday.
Greece needs to pay back a £325 million loan, which falls due on June 5 to the International Monetary Fund, which along with the Eurozone funds Greece. It has further debt repayments to make in the coming weeks, which has put the country on the brink of bankruptcy and it balances the need to repay its loans against the need to maintain its in-country state salary and pension payments.
#Greece Bailout Could Steal the Stage at #G7 Meeting http://t.co/GR1yXadv1Z via @vkaramanis_fx @HansNichols pic.twitter.com/TIdwGKZhQj
— Zoe Schneeweiss (@ZSchneeweiss) May 27, 2015
The IMF on Wednesday said it would not budge on its repayment schedule, demanding Greece stick to its austerity measures and plans for reform of its fiscal system
However, the US has been pressing for a compromise deal that would keep Greece within the Eurozone and — according to Lynn — within the western alliance.
"Americans Would Bail Out Greece"
He told Sputnik exclusively the US would "lean on Angela Merkel, could lean on Francois Hollande to be a bit more generous and try and sort the situation out. But there's another level of intervention — which may be a little way off — but I think the Americans would bail out Greece.
"It's an endgame. You've got to remember, it's not just an economic story: it's a geopolitical story. Greece has always been important to the western alliance.
"You can go back in history to after World War II when there were troops going into Greece to stop it falling into the hands of the Communists. Sixty to 70 years later, the same forces are at work," Lynn told Sputnik.
"Rather than see Greece fall into chaos, the Americans will bail it out."
He said the Eurozone and the US have different interests: Eurozone countries need to preserve the euro, but the US does not see that as a priority. The US is more interested in maintaining the stability of the EU without Greece descending into chaos.
We are negotiating to obtain secure & stable conditions, in advance, for #Greece's economy. http://t.co/YfknVVc5RI pic.twitter.com/Zypq8NscH2
— Alexis Tsipras (@tsipras_eu) May 27, 2015
Moreover, the US was spooked when Greek Prime Minister Alexis Tsipras went to Moscow in April, looking for support for its position as well as for a possible discount on its gas prices. Lynn said:
"Over in the state department in Washington, they've got a map and a few history books and they sort of know that [Russian financial assistance] is always an option."
Lynn said Angela Merkel's priority is to stop Greece falling out of the euro, which would create a crisis of confidence in the currency, whereas the priority of the US is keeping together a united Europe, which is why — ultimately — the US would be prepared to bail out Greece, or act as guarantor of its loans.
