IMF Vows to Stand by Greece
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The head on the International Monetary Fund, Christine Lagarde, yesterday pledged to stand by debt-ridden Greece and at the same time urged banks to do more to stabilize the eurozone’s economy.
According to a Reuters report, Lagarde vowed to stand by Greece, adding that the global lender, as well as the troika international lenders including the European Commission and the European Central Bank, is looking for new ways to keep Greece afloat.
The head on the International Monetary Fund, Christine Lagarde, yesterday pledged to stand by debt-ridden Greece and at the same time urged banks to do more to stabilize the eurozone’s economy.
According to a Reuters report, Lagarde vowed to stand by Greece, adding that the global lender, as well as the troika international lenders including the European Commission and the European Central Bank, is looking for new ways to keep Greece afloat.
Reiterating the Fund’s commitment, Lagarde said:
[quote] The IMF never leaves the negotiation table. We are in Greece at the moment … and we are engaged in dialogue with the Greek authorities. [/quote]
However, she also acknowledged that Greece could do more by collecting taxes from wealthy Greeks to boost government revenues and implement economic reforms to strengthen the economy.
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Greece, in its fifth year of recession, is expected to see its economy shrink 6.9 percent this year. A Greece think-tank, previously headed by finance minister Yannis Strournaras, said last month that the economy has shrank 20 percent since the end of 2007.
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Earlier today, Greek political leaders agreed to 11.5 billion euros ($14 billion) of fresh austerity cuts for 2013 and 2014, paving the way for the recession-ravaged country to secure crucial funding from the troika.
Speaking ahead of a critical interest rate meeting by the European Central Bank, Lagarde also weighed in on Mario Draghi’s, the Bank’s president, recent pledge to do “whatever it takes” to save the euro.
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Lagarde signalled that the IMF believes the central bank should cut its rates given the low inflation levels.
She also said “there are reasons to hope the situation will improve” if European leaders deliver on promises for stronger action by next month.
Urging policymakers everywhere to maintain their vigilance and “crisis-management mode”, Lagarde said the Fund is pressing governments around the world to step up their response to early signs of a “troubling” global slowdown.
Making reference to the so-called fiscal cliff in the United States, she said:
[quote] The euro area is not the only problem. [/quote]
In a downbeat assessment of the global economy, Lagarde said “there is nothing very encouraging“ and added that the world economy is experiencing a decline in confidence, driven by doubts over the ability of European and US lenders to manage financial problems.
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