IMF chief Christine Lagarde warned on Wednesday of the risk of ‘contamination’ if Greece quits the euro and said the euro zone 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 favorable 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 euro zone countries might see the integrity of the 17-country bloc as worthwhile enough to keep supporting Greece with more money.