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IMF Chief Lagarde Says Patience Thin on Greece

IMF chief Christine Lagarde says Greece is ignoring ideas on how to save the country

As inspectors for international lenders returned to Athens to determine whether to release an $11 billion loan installment needed to keep the country from going bust, International Monetary Fund chief Christine Lagarde said investors are weary of helping Greece. “If the Greeks do not want our advice, we can’t do anything for them,” the IMF chief was quoted as saying ahead of a meeting with Finance Minister Evangelos Venizelos, who kept insisting Greece will be okay, words that only he and Greek leaders now seem to believe.
Venizelos earlier spoke at the Institute of International Finance (IIF) annual meeting in Washington, the banking organization whose members in July agreed to take a 21 percent loss on their loans to Greece, part of a $152 billion emergency package put together by the IMF and European Union and European Central Bank, the so-called Troika. That has failed to slow Greece’s slide toward bankruptcy, because of requirements Greece cut workers pay deeply, instill new tax hikes – including on the poor – and slash pensions, while largely ignoring tax evaders costing the country nearly $40 billion a year in lost revenues.
Venizelos said that a series of meetings in Washington had provided a “very clear message of support” for Athens, a statement contradicted by other officials who warned Greece is on the brink of a collapse that could threaten the 17-members of the Eurozone who use the euro as a currency.
“The message was very clear: Greece is and will always be a member of the euro,” Venizelos said after talks with German Finance Minister Wolfgang Schaueble and his counterparts from Italy, France and Belgium. But a few days before he also said: “The situation is extremely critical, I would say dangerous … There is a sense of nervousness among the larger Eurozone members that is affecting us.” Despite Greece’s woes, he said he’s confident the Troika will release the $11 billion loan in October, without which Greece won’t be able to pay its workers and pensioners.
While he was talking politics in Washington and seeking deals, rising anger was brewing in Greece where a series of transport strikes caused gridlock in Athens and growing rage over a property tax put into electric bills was fomenting another “We Won’t Pay” movement. Many Greeks have already stopped paying for the Metro, highway and other services because they said the money is going to support the country’s rich elite they blame for the crisis. Venizelos, who has replaced Prime Minister George Papandreou as Greece’s leader on the crisis with the Premier fading into the background, called for calm. “A climate of domestic stability, consensus and participation must prevail,” he said. According to an opinion poll published in Kathimerini, nearly 67 percent of Greeks want the country to remain in the Eurozone, though 60 percent believe the country is likely to default soon.
Meanwhile, the New York Times reported that German Chancellor Angela Merkel, struggling to convince her citizens to keep giving money to Greece, warned that if Greece goes under it will cause a recession as deep as that in 2008 when the U.S. investment bank Lehman Brothers was allowed to fail, triggering a series of financial failures around the world. “We are doing it for ourselves,” she said. “Otherwise, the stability of the euro would be in danger.” This is a big week for Greece as the Parliament debates the property tax and Slovenia and Finland join Germany in deciding whether to proceed with a second bailout for Greece of $157 billion. With the Greek Contagion spreading to other economically weakened EU countries such as Spain,  Italy, Portugal, and Ireland, the Times said there is a growing sense that the combined debt is too much to manage and that those countries are now “too big to bail.”
(Sources: Kathimerini, AP, New York Times)

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