IMF head says Eurogroup deal key to saving Greece

Published Nov 16, 2012 07:08am

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Christine Lagarde, IMF managing director, gestures as she speaks at a press conference in Manila, Nov 16, 2012. — Photo by AFP

MANILA: A crucial meeting of Eurozone finance ministers next week will be key to getting Greece “back on its feet”, IMF chief Christine Lagarde said Friday, as she cut short her visit to Asia to attend the talks.

The International Monetary Fund managing director told a news conference in Manila that the Eurogroup's focus was getting the debt-wracked country on a “sustainable” path as soon as possible.

“You know, it's not over until the fat lady sings, as the saying goes,” Lagarde told reporters when asked if she expected a deal to be forged at the meeting next week in Brussels.

“It's a question of working hard, putting our mind to it, making sure that we focus on the same objective, which is that...Greece can operate on a sustainable basis, can recover, can get back on its feet, can re-access markets as early as possible,” she said.

“That is what is driving the IMF's determination.”

Eurogroup president Jean-Claude Juncker has said he hoped the meeting on Tuesday would clear the way for a payment of 31 billion euros that Greece desperately needs to avoid default.

Juncker has clashed publicly with Lagarde over extending Greece's country's agreed debt-to-gross domestic product ratio target.

Juncker wants the target of 120 per cent of Greek debt-to-GDP ratio by 2020 pushed back to 2022. It is now at 170 per cent.

Despite two bailouts involving the EU, the European Central Bank and the IMF as well as a private-sector debt cut, Greece is set to enter its sixth year of recession in 2013, pushing its debt mountain to 190 per cent of output in 2014.

The Eurozone slipped back into recession for the second time in just three years in the third quarter, according to data released Thursday, raising fears it would make the resolution of the debt crisis even more difficult.

“The recession, it is not exactly a surprise. We had actually forecasted there would be a recession in the Eurozone in 2012 and growth will pick up in 2013,” Lagarde said Friday.

“I certainly hope that will be the case in 2013 if policy makers will actually act and do what is necessary and appropriate to recover from the crisis.”

Lagarde was due to attend an Association of Southeast Asian Nations summit in Cambodia, but she would now be represented at the weekend meeting by IMF deputy managing director Naoyuki Shinohara, IMF spokeswoman Gita Phatt said.


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