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Greeks must sort this out or face ruin - US

The Greek government must make tough fiscal decisions and quickly reach an agreement with international creditors and fellow members of the eurozone, or it risks devastating both the country's economy and people, US Treasury Secretary Jack Lew has said in an interview to be broadcast today.

"I think we're at a moment now where the burden is on Greece to come back with a response that's the basis for reaching an agreement as quickly as possible," he said in the interview on CNN's Fareed Zakaria GPS programme.

Greece needs to secure a cash-for-reforms deal in order to avoid defaulting on a €1.6bn IMF loan at the end of June, but talks have stalled and the long-struggling country faces being forced out of the eurozone if it fails.

The US is turning up the heat on the Greek government to break the deadlock.

Last Tuesday, Lew called Greek Prime Minister Alexis Tsipras to emphasise "the urgency of Greece making a serious move to reach a pragmatic compromise with its creditors", and on Wednesday, the State Department sent the same message.

Depositors shaken by the rapid deterioration of negotiations have been rapidly pulling money out of Greek banks, raising the spectre the government may soon impose capital controls.

Lew cautioned that markets' reaction to a default, or to the country's withdrawal from the eurozone, cannot be foreseen, adding "I don't think anyone should want to find out".

Meanwhile, Russian president Vladimir Putin has criticised the European Union's handling of the Greek debt crisis, insisting its focus should be on helping the country restore economic growth.

He said Moscow should be "applauded" for sealing an investment agreement with Greece on a pipeline to carry Russian gas to Europe via Turkey, with the potential for transit payments worth hundreds of millions of pounds a year to Athens after its completion in 2019.

UK Chancellor George Osborne warned the EU needed to be "prepared for the worst" after a meeting of eurozone group finance ministers in Luxembourg failed to break the deadlock.

Sunday Independent