–No Further Comment on Greece; Loan Program With Country Not Govt
By Heather Scott
WASHINGTON (MNI) – The International Monetary Fund “fully supports”
the European Central Bank’s quarter-point rate cut announced early
Thursday, an IMF spokesman said.
“We fully support the interest rate reduction announced this
morning which reflects the decrease in inflationary pressures and the
intensified negative outlook for the Eurozone,” spokesman David Hawley
told reporters at the regular biweekly briefing.
It was the only substantive comment on the situation in the Euro
Area or Greece, as Hawley repeatedly referred back to the statement
issued late Wednesday by IMF Managing Director Christine Lagarde who is
in Cannes at the Group of 20 summit.
Lagarde’s statement indicated continued support for Greece and the
agreement reached last week with Eurozone leaders, which includes a debt
writedown of 50%, despite the announcement the government will hold a
referendum on the program.
But Lagarde added this caveat: “As soon as the referendum is
completed, and all uncertainty removed, I will make a recommendation to
the IMF Executive Board regarding the sixth tranche of our loan to
support Greece’s economic program.”
Removing “all uncertainty,” seems a high hurdle and an uncertain
prospect, even if the Greek government brings the referendum forward to
December rather than January, especially amid reports early Thursday,
later denied, that Prime Minister Georges Papandreou intends to resign.
However, Hawley noted IMF policy is that loan programs from the
fund are with countries not specific governments, and “if authorities in
any country continue to implement the program agreed, then fund is in
position to continue the program.”
** Market News International Washington Bureau: 202-371-2121 **
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