LONDON - Agence France-Presse
Lagarde speaks at a news conference at the Treasury in London on May 22. REUTERS photo
IMF chief Christine Lagarde warned yesterday of the risk of “contamination” if Greece
quits the euro and said the eurozone might therefore see the value of paying more to keep Greece
in. The International Monetary Fund managing director told BBC radio in an interview that a Greek
exit from the single currency was “certainly not the most favourable option and not one that we encourage”.
The trouble with a Greek
departure is “the risk of contamination, from one isolated member that would be carved out, to other members within the zone that want to stay within the zone, who are wanted by their partners and who are doing all the right things,” the former French
finance minister said.
Asked what would happen if Greek
voters rejected austerity in their second general election in the space of weeks on June 17, she said: “If the Greek
people don’t want to pay the price, somebody has to pay the price.” Lagarde said other eurozone countries might see the integrity of the 17-country bloc as worthwhile enough to keep supporting Greece
with more money.
“It may well be that members of the eurozone will be prepared to support financially more and maybe longer the Greek
country and population to stay within the zone,” she said.
She said Greece
had made “huge efforts but they have more to do” to sort their finances out.
Lagarde said there was an “inconsistency” in Greek
voters rejecting political parties that supported “belonging to the eurozone and being sensible about it” and saying they want to remain in the euro, as doing so “has a price”.