The administration is sending mixed messages to the government of Greece, following an announcement from Prime Minister Alexis Tsipras that his country will default on upcoming payments to European creditors.
“We’ve long made clear that we expect the Greeks to keep their commitments,” White House spokesman Josh Earnest told reporters on Monday, responding to news that Greece will default on a more than $1.5 billion euro payment due to the International Monetary Fund on Tuesday.
That announcement from Leftist Prime Minister Alexis Tsipras runs counter to the advice he received from Treasury Secretary Jack Lew during a phone call on Sunday, when Lew “stressed the need for Greece to take necessary steps to maintain financial stability in the run up to the referendum, including by working closely with its international partners,” according to a readout of the conversation.
Tsipras blind-sided EU policymakers over the weekend by announcing that he will put the question of another austerity-inducing bailout to a popular vote.
Greek banks are closed this week, and the government has imposed capital controls ahead of the July 5 vote—one that could determine Athens’ place in the Eurozone.
Should Greek voters reject creditors’ proposal, as the government is urging them to do, it would be the first time the nation brushed aside an international rescue loan since the crisis began more than five years ago, and it would likely lead to the country abandoning the euro.
“You shouldn’t commit suicide because you’re afraid of dying,” said Jean-Claude Juncker, the president of the European Commission, urging Greek voters to take the bailout. “You should say ‘yes’ regardless of what the question is,” he said, adding that a “no” vote means “Greece is saying ‘no’ to Europe.”
French President Francois Hollande also urged Greeks to vote in the affirmative.
“It’s a question of knowing whether the Greeks want to remain in the Eurozone—which is where they belong in my opinion—or if they will take the risk of exiting,” he said on Tuesday.
At the White House, Earnest refused to speak to the wisdom of holding a referendum, merely noting that “there’s a democratic process that’s underway in Greece and that is a process that will be determined by the Greek people.”
He noted, however, that it is “in the interest of the United States for Europe to be closely integrated, strong, and effective.”
The presidential spokesman doused concerns that financial turmoil created by a so-called “Grexit” could harm the US economy. “Greece does not pose a major direct risk to the United States banking system,” he claimed from the podium.
President Obama had conversations over the weekend with President Hollande and German Chancellor Angela Merkel, Earnest noted. He did not have any conversation between President Obama and Prime Minister Tsipras to report.
Hollande and Merkel both represent their creditor banks that have long insisted on Greece paying back its debts through harsh austerity measures that have already cratered its economy.
