IMF Head Lagarde Warns Preparations Must be Made for Greek Euro Exit
The global financial system must be equipped to deal with the potential exit of Greece from the eurozone in the near future, warned the managing director of the International Monetary Fund (IMF), Christine Lagarde, speaking during an interview with French television station France 24.
The head of the IMF added that it is vital for Europe to make contingency plans for any eventuality as the Greek stalemate continues, with no party able to form a government and new general elections now planned for next month. The favourites to win, Syriza, are opposed to meeting the terms of Greece’s second EU bailout, threatening a disorderly exit of the country from the single euro.
Lagarde added that the IMF “certainly doesn’t hope” Greece will have to depart the economic bloc, but she did warn that: “We have to be technically prepared for anything”.
The managing director of the IMF went on to say that a Greek exit would be “messy”, as it would have a negative impact on the eurozone’s growth, trade and financial markets.
The region’s on-going problems were underlined by new data from Eurostat yesterday, which revealed that its gross domestic product remained flat in the opening quarter of 2012, with only Germany showing any economic growth. Corporate treasurers will no doubt be even more wary of the currency and the region then they have already been this year.