Greece must show results, says French finance minister

20th May 2011, Comments 0 comments

Greece must do better than it has done so far in tackling its massive debt problem, France's Finance Minister Christine Lagarde has told an Austrian newspaper in comments to appear Saturday.

"Greece has to come up with results and for that the country must do more than it has over the last 12 months," Lagarde, a leading contender to take over as head of the International Monetary Fund, told Der Standard.

Greece received a 110-billion-euro ($156-billion) bailout from the EU and IMF last year but it was planned that the country would begin to return to the markets next year to refinance part of its massive debt.

With markets now asking over 25 percent interest on two-year Greek bonds, that looks increasingly unlikely and the EU and IMF have been looking at helping Athens meet an expected gap of around 60 billion euros.

But with Athens not making sufficient progress on cutting its deficit, there has been increased talk -- even by European officials -- that Greece will not be able to keep on top of its debt of around around 340 billion euros.

On her outspoken opposition to restructuring Greece's debt, she said: "We have already given Athens more time to to pay back its eurozone loans -- that is already a concession.

"It was only fair that Greece should be expected to its share of the work," she added.

The interest rate on Greece's bailout loans has already been reduced and repayment deadlines extended.

Lagarde acknowledged that the Greek government had made progress, but said in some areas they were not moving forward fast enough, a reference to the 50 billion euros in privatisations that the EU and IMF want to see.

"If Greece comes up with results, then we can consider extra aid; failing that, the question is to know to what extent Greece is ready to play the game in its own rescue plan," she added.

"What we certainly don't want is a bankrupt state, a default in payments in Europe," Lagarde insisted.

And while the socialist government in Greece has referred to its rising unemployment figures, Lagarde pointed out that jobless levels in Spain were even higher.

Spain, she said, "had nevertheless done its job, has made savings and succeeded in turning itself around."

Of the possibility that she might succeed Dominique Strauss-Kahn as IMF chief, she said she was flattered her name has been mentioned but would not comment on any possible candidacy.

An EU source in Brussels said Friday she was "practically a shoo-in" as the EU's candidate and said an EU announcement was expected at next week's G8 summit.

Fitch Ratings on Friday slashed Greece's credit ratings by three notches to B+ due to the massive challenges of correcting the country's finances but said it expected Athens to get more help and avoid restructuring its debt.

© 2011 AFP

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