Belfast Telegraph

Thursday 21 August 2014

Greece urged to honour rescue plan

IMF head Christine Lagarde hopes Greek elections will produce a government committed to abiding by terms of the country's bailout

IMF head Christine Lagarde has said she hopes that elections in debt-stricken Greece produce a government committed to sticking to the terms of the country's rescue package.

Ms Lagarde said the IMF would hold talks with any democratically-elected government but she added that the organisation was also "rules based" and would not discriminate in favour of any member.

"The clear preference of the IMF in the interests of stability is that the appropriate implementation of the programme be endorsed by whichever of the political forces that will result from the election on June 17 and that those political forces will engage in constructive dialogue with both the euro area partners as well as the IMF in order to proceed to that implementation," she told a news conference at the Treasury in London.

"Now failing that, obviously as I have mentioned in the past, the job of the IMF is to also look at all possible technical options and all possible alternatives."

Ms Lagarde said the IMF "never leaves the table" in discussions with members which have democratically elected governments. But she warned: "Equally we abide by the principle that we are a rules-based institution and there is no reason why any particular member in any particular zone would have the benefit of different principles, different policies and different rules."

She added that Greece needed to tackle a "huge productivity gap". "There is a competitiveness issue, there are structural reforms that need to be put in place, there is tax collection that has to happen," she said.

Ms Lagarde was speaking after campaigning got under way in crucial elections on June 17 in Greece.

The vote is seen as a choice on whether Greece stays in the euro.

A May 6 poll produced no government and triggered a political crisis.

The vote was split between parties that insist the country lives up to its austerity pledges and continues to receive outside assistance to stave off bankruptcy, and those that want to revoke or revise them because they are too punishing.

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