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31 July 2011

FT: Lagarde warns Europe to speak with one voice


European authorities should stop public bickering and speak with one voice to make the second rescue package for Greece work, warned IMF Managing Director, Christine Lagarde. But Ms Lagarde also defended the eurozone's handling of the Greek crisis.

In an interview with the FT, Ms Lagarde said public discord between eurozone ministers and the European Central Bank over the last bail-out had created confusion in the markets. “Putting on my European hat for a microsecond...we did not communicate it in a harmonised fashion, nor did we particularly speak with one voice”, she said, adding that this time the Europeans must “stick to the script”.

Several emerging market and other non-European countries have questioned whether the IMF should be announcing fresh money to Greece with an uncertain chance of success, expressing concern that private bondholders are being asked to take too small a writedown.

On July 21 the eurozone announced its second rescue plan for Greece and said it wanted more money from the IMF. The IMF would continue to be involved in the Greek rescue, Ms Lagarde said, though declined to reveal what level of financing it would provide.

Full article (FT subscription required)



© Financial Times


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