ECONOMY

Greek crisis can’t be ruled out, says IMF chief economist

As negotiations for Greek economic reforms drag on, a further “crisis” can’t be ruled out, according to International Monetary Fund chief economist Olivier Blanchard.

“We clearly are in the middle of negotiations with the Greeks, and we very much want to come to an agreement and we hope we will,” Blanchard said at a press briefing in Washington Tuesday. Blanchard’s remarks about a potential crisis came from his opening statement.

Greek government officials returned to work Tuesday after an the Orthodox Easter holiday with less than two weeks to go before euro area finance ministers meet to discuss the bloc’s most indebted-state in Riga, Latvia. Greece must come up with a precise list of reforms in order to unlock further aid, European Union Economic and Monetary Commissioner Piere Moscovici told European Parliament Tuesday.

“Now, what happens if no agreement were reached?” said Blanchard. “A number of things are fairly clear. The first one is that say an exit from the euro would be extremely costly for Greece, would be extremely painful.”

[Bloomberg]