The serious possibility of the crisis expanding to Spain and of a possible Greek exit from the eurozone depending in the outcome of the June 17 election, that Moody’s warned would see a downgrade for the bloc’s countries with the top credit rating, have generated huge worries among European officials.
In this context the French head of the International Monetary Fund, Christine Lagarde, stressed in Saturday’s edition of German newspaper Suddeutsche Zeitung the lack of a long-term vision in Europe.
The IMF managing director also spoke in favor of a European banking watchdog, of common guarantees for bank deposits, and of a so-called “debt repayment accord” as proposed by German experts, while expressing her confidence that Greece will overcome the crisis.
Lagarde reiterated that what she said last month in an interview to The Guardian newspaper was misunderstood: “I said that I feel great respect for the sacrifices the Greek people are making to overcome the crisis. I also said that I am sorry that my observations [about Niger] were misunderstood and hurt some people’s feelings. That was not my intention.
“In the last few years we support Athens very warmly and we are aware of the difficulties Greece has been going through. We continue to believe that the country will get over the crisis and have a better future, when all parties involved take the appropriate measures as they are supposed to. I assure you that the IMF, just like myself, are fully supporting Greece.”
Asked by the German newspaper to determine Greece’s standing, Lagarde said that “the IMF’s principle is never to abandon the negotiating table and to continue talks with officials. So let’s wait, as other institutions involved do, for the June 17 election.”
The head of the IMF also called on Germany to show its solidarity, as she asked the European Union to seek joint solutions to the crisis: “A joint guarantee of debt would be a message to the financial markets that the Europeans are serious when they seek to tackle the problems.
“What undermines all efforts to safeguard the euro is insecurities and doubts about the long-term vision of politicians and about the sustainability of the eurozone,” said Lagarde.
German Finance Minister Wolfgang Schaeuble said in an interview to Passauer Neue Presse that no one should lie to the Greek people.
“There is no easy way,” he said. “Greece lived for years beyond its means and did not perform the necessary reforms. Reforms are essential,” Schaeuble stressed.
Eurogroup head Jean-Claude Juncker took a slightly different viewpoint by drawing a line between the crisis in Spain and that of Greece, in an interview on German radio.
“Spain has a banking problem, whereas Greece has a much more general problem. We may have put pressure on Greece to speed up its efforts,» said Juncker.
He underscored that serious growth prospects should open now, that he is not against a revision of the terms of the bailout agreement, and that Greece must stay in the eurozone.