Euro Muscles in Brussels: Christine Lagarde on Greece

by iMFdirect

The head of the IMF Christine Lagarde was clear during her press conference in Brussels yesterday—European leaders’ deal to help Greece and the euro area is a very constructive and comprehensive package of measures to resolve debt problems.

“What to me is critical—really a game-changing decision—is the leaders’ commitment and determination to provide support to countries until they have regained market access, provided that they successfully implement their programs.”

Watch the press conference:

The 17 heads of state of the eurozone have agreed to provide €109 billion in fresh financing for Greece. Together with voluntary contributions from the private sector and continued support from the IMF, this will close the financing gap in Greece’s budget and give the country the breathing room it needs to restore growth and competitiveness.

Greece has not yet requested a new program from the IMF, but Lagarde said it was the global lender’s intention to be an active participant in helping Greece restore growth, debt sustainability and return to financial markets.

The European leaders also agreed to make the terms of the European Financial Stability Facility more flexible, a measure called for by the IMF in its recent assessment of the euro area.

“This flexibility is a key element, in the view of the IMF,” said Lagarde.

2 Responses

  1. I agree John, we need action and proper rules, regulations. We need to get the house in order, and stop tyre kickers ( some politicians) destroying the Eurozone. I live in Dublin, Ireland (Alcatraz) and the former government here totally destroyed Ireland together with their happy banker friends. Many people here were shouting from the rooftops for a long time before the crash happened that placing all eggs in one basket–a strategy that was dangerous and stupid, but we were called traitors and talking down the country, ha! look at them now!

    Did not help me, had to close my business, let everyone go and I am just about had enough of Europe!!

    If I did something wrong with my accounts, I would be arrested and brought to court, no politician in Europe have even been questioned about any of the misleading and fraudulent behaviours from both government officials and bankers….

    One rule for the people, one rule for the politicians… makes me sick

  2. I think that the salvation of the Eurozone in the present and its
    survival in the future is the greatest challenge it faces from the
    beginning of the monetary integration . However I don’t know many countries in the world to have a budget surplus , neither now nor in the past . So , I think that the only way we can achieve economic stabilization in Eurozone is selective default for all countries participating in the euro area , even Germany and France , in a voluntary way . That means , lenders must give away a part of the eurodebt . It is impossible for Germany and France to give a solution to the debt crisis in the long run . Eurobond issues are a medicin with a temporary effect , not the ultimate therapy for debt reduction . And debt reduction or budget surpluses is the only way for an economy to breathe and start growing again . Without them , animal spirits are low ( mainly ,consumption and investment ) , due to high interest rates . This is bad , because private investment is full of incentives and sets the production of a greater variety of goods than government spending . So it is crucial to keep the private sector alive and this can be done only by keeping eurodebt at reasonable levels .

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