The United States has pressed the European Union and Greece to reach agreement on a financial lifeline for the embattled country, whose EU bailout expires at month's end.
Speaking on the eve of a eurozone finance ministers meeting in Brussels to consider Athens's demand for a six-month extension of the EU loan program, a senior US Treasury official said the Obama administration was closely monitoring developments in the situation.
"The message to Germany is broadly parallel to the one to Greece and others in Europe ... it's important for the euro and the global economy to reach agreement," said the official, speaking to reporters on condition of anonymity.
"The Europeans have the capacity to handle these challenges," the official said.
"It will require vigorous engagement from both sides" as well as "a constructive and pragmatic way forward."
Germany earlier on Thursday rejected a take-it or leave-it request by Athens for a six-month extension to its EU loan program, but both sides indicated later that there was still hope for a solution.
The new Greek government, elected on an anti-austerity platform, wants to restructure its bailout agreements and debt in a way that allows the government more room to spend and stimulate its economy after years of recession.
But lenders insist the country needs to adhere to promised reforms and do not want to extend more money without such commitments.
"If the talks break down I think Greece will feel economic effects immediately," the US Treasury official said, adding there also would be an increase in uncertainty in the 19-nation eurozone, whose economy is already "soft" and facing disinflationary pressure, as well as in the global economy
