Fitch plays down contagion fears

Fellow eurozone countries face no risk of «contagion» from the debt and deficit crises afflicting Greece, Portugal and Spain, the chairman of ratings agency Fitch said yesterday. Marc Ladreit de Lacharriere told Europe 1 radio that while the state of public finances in the three countries was «worrying… there is really no contagion» in other members of the 16-nation euro currency bloc. Eurozone financial markets were roiled in December when all three agencies downgraded Greece’s sovereign debt, voicing doubts that Greek authorities would be able to curb public spending. «Is Greece capable of taking steps to improve the situation?» asked Ladreit de Lacharriere. «There are doubts because Greece has never really followed directives coming from Europe. They have not respected the [European Union] monetary and economic stability pacts.» Meanwhile, Arnab Das of Roubini Global Economics said that Greece needs an International Monetary Fund program and further spending cuts to allay investor concerns about its debt load and contagion in other European markets. «It would help if there was a very strong IMF program with a lot of conditionality attached,» Das, managing director of market research and strategy at Roubini Global in London, said in an interview on Bloomberg Television. «The IMF, as an outside, disinterested, objective party, would evaluate the program and act as a guidepost the market can follow, rather than the European Union, which is an interested party.»

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