By Ian Talley
The Obama administration, after pressing Greece and its European
creditors to compromise for weeks, returned to its familiar role on
Monday of prodding from the sidelines.
A day after Greek voters soundly rejected bailout terms offered
by its creditors, the White House renewed its calls for Athens to
restructure its economy and for Europe to offer the beleaguered
county hope by offering better terms on its debt.
Keeping Greece in the eurozone "will require both a package of
financing and reforms that will allow Greece to achieve, or at
least be on a path towards, some debt sustainability," White House
press secretary Josh Earnest said.
"But it is also important for Greece to implement the kinds of
reforms and to keep the commitments that they've made previously,"
he said.
The calls from the world's most powerful country may do little
to change the fate of negotiations. The U.S. is much more of a
bystander in the latest stage of the European crisis, struggling to
sway the deeply entrenched sides.
"They're marginalized," said Robert Kahn, a senior fellow at the
Council on Foreign Relations and former economist at the
International Monetary Fund. Compared with 2010, when the U.S. was
front and central to resolving the global financial crisis, "people
just don't listen as much to us."
For months, U.S. officials have pushed Greece and its creditors
toward what they called a "pragmatic compromise." If Greece would
vow to tough economic overhauls and its European creditors would
consider debt relief, U.S. officials argued, Athens could avoid
falling deeper into economic crisis and the eurozone could prevent
further hiccups in its long, slow recovery from the financial
crisis.
At the same time, Mr. Earnest also played down the potential
impact of the Greek crisis on the U.S., saying the U.S. has little
direct exposure to the country. Still, he warned that if Greece's
woes weighed on the eurozone's economy, it could damp U.S.
exports.
Neither Greece nor the European creditors gave enough ground in
recent weeks to ease the standoff, leaving U.S. officials to do
little more than monitor the fallout.
Now, Treasury Department and Federal Reserve officials will be
watching for signs of the crisis spreading throughout Europe and
global financial markets. Europe's troubles are just one of area of
global weakness the central bank is watching as it considers when
to raise interest rates for the first time in nearly a decade.
The U.S. has tried to play the role of independent adviser to
both Greece and its eurozone creditors. But Washington's financial
diplomacy hasn't yielded much fruit. That is partly because the
U.S. has had little leverage to wield on the issue.
Given the eurozone's stouter financial defenses, a healthier
U.S. economy and a host of other geopolitical priorities--including
Iran nuclear talks, the rise of Islamic State and growing tensions
with China--the Greek crisis hasn't been the administration's
highest priority.
"We've made clear that we continue to believe it's in the U.S.
interest and the global interest for these differences to be
resolved, but ultimately, it will be the responsibility of the
Europeans to resolve them," Mr. Earnest said.
The eurozone has built up buffers to insulate itself and the
global economy from a major disruption in markets. U.S. officials
point to the currency union's bailout funds, the European Central
Bank's monetary firepower and efforts to shore up the financial
system as largely sufficient to ensure the region is much better
prepared to weather a collapse of the Greek economy or an exit from
the currency union than in previous years.
"You cannot keep on squeezing countries that are in the midst of
depression," Mr. Obama said at the time. "At some point there has
to be a growth strategy in order for them to pay off their debts to
eliminate some of their deficits."
The newly elected Greek prime minister, Alexis Tsipras, took
those comments as support for his push to rewrite the terms of his
country's bailout with less budget belt-tightening and creditor
cuts in Greece's debt burden.
More recently, the administration has largely backed Greece's
creditors, the eurozone lenders and the International Monetary
Fund.
In dozens of phone calls in the weeks preceding the referendum,
U.S. Treasury Secretary Jacob Lew and his lieutenants told top
European officials Athens needs to commit to tough economic
overhauls while Europe should be prepared to offer Greece debt
relief.
Write to Ian Talley at ian.talley@wsj.com