ECONOMY

IMF ready to come to Greece’s aid

The International Monetary Fund (IMF) is ready to help Greece if it or the European Union asks for assistance but the 27-nation EU should create its own mechanism to help such cases, the IMF’s head for Europe said yesterday. «The EU should create a mechanism to help out countries which found themselves in Greece’s shoes. But one has to believe Greece will solve its problems by itself,» Marek Belka told Reuters in an interview. Asked whether the IMF would be ready to help bail out Greece, Belka said: «Yes, we are ready. But it depends on whether the EU or Greece will request it.» Soaring budget deficits and worsening debt dynamics have dealt Greece consecutive downgrades by the three major credit rating agencies this month, resulting in higher borrowing costs for the eurozone’s most indebted country in 2010. Investors have worried that the debt problems could ultimately prevent Greece from borrowing in the bond market, potentially forcing the EU into a costly bailout and denting confidence in the euro and European assets in general. Meanwhile, European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said that financial markets are reaching the limits of their tolerance on debt levels seen in countries such as Greece. «The markets reach a point where they say enough is enough,» Almunia told Spanish radio station SER. In the case of some countries, including Greece, investors have said they won’t keep lending if governments don’t take steps to cut debt levels, he said.