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Europe Ignores America’s Free Advice

Jack Lew and Antonis Samaras shaking hands
Treasury Secretary Jack Lew (right) and then-Greek Prime Minister Antonis Samaras in 2013.
Photo courtesy New Democracy on Flickr.

If you have ever had a nosy neighbor who freely offers advice on topics that are none of his business, you understand how the leaders of most eurozone countries probably feel about U.S. Treasury Secretary Jack Lew.

Lew, and through him the Obama administration, thinks German Chancellor Angela Merkel and her colleagues should do everything in their power keep Greece in the common currency when they convene at a climactic European Union summit scheduled for Sunday. Judging from the response in Europe, it seems Lew’s advice offers as much insight - and has as much influence - as the suggestions that a bleacher-riding fan offers to a batter at the plate or a manager in the dugout.

That nobody is listening doesn’t stop the fan from yelling, nor has it stopped Lew from repeatedly speaking his piece about the potential for a Greek exit from the eurozone. In remarks at the Brookings Institution on Wednesday, Lew yet again called for compromise, acknowledging that Athens should agree to reforms but also urging European creditors to continue to work to keep Greece in the fold. The Financial Times reported that Lew warned of hundreds of billions of dollars of global economic damage if Greece left the eurozone.

“In the next few days what we’ll see is [whether] the parties come together and 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,” Lew said. “I certainly have ideas about how you can do that.”

Whether they are good or practical ideas doesn’t really matter, since the United States has no skin in the game. While we tell European countries how to spend their money, we have nothing of our own at issue, as even a complete Greek meltdown would be unlikely to create any long-lasting effects on the American economy. Lew suggested specific triggers for debt restructuring would be helpful, and said, “I believe there is still a solution available here,” though he also observed, “It is going to be a lot to do in a short period of time.”

Much like that of the “helpful” fan in the bleachers, Lew’s advice seems to have been duly ignored. As of this writing, no one who is prominent within the eurozone has evidently bothered to address Lew’s remarks directly - or, for that matter, those of other bystanders such as Japan’s economics minister, Akira Amari. This is not to say no one in the eurozone agrees with Lew. France, for instance, has made clear that it remains committed to doing all it can to keep Greece from exiting the shared currency. France, unlike the U.S., will actually feel the aftereffects of the Greek crisis, however; as such, even the French will not agree to extend help without some true reform measures from Athens.

The vast majority of Greece’s debt is owned by European countries. They are the ones with real money at stake, so who are we to tell them how much of the existing debt they should consider writing off, or how much fresh money they should extend, to a recalcitrant nation whose voter-ratified economic reform policy is “Just Say No?”

The response to Lew’s advice has not been agreement. It has not been objection. It has just been complete indifference. The silence, more than any other reaction, demonstrates just how irrelevant we have become, and remain, in the Greek crisis.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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