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Greek Default “Is Not an Option” and “Never Has Been” Says IMF

Friday, May 7th 2010 - 05:36 UTC
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IMF director of external relations Caroline Atkinson IMF director of external relations Caroline Atkinson

A default by Greece on its debt obligations is not and has never been an option, a spokeswoman for the International Monetary Fund (IMF) said on Thursday. A Greek “default is not on the table, has not been on the table” insisted IMF director of external relations Caroline Atkinson.

“The Greek authorities themselves have repeated that,” Atkinson said, adding that European Central Bank President Jean-Claude Trichet had also said a default was out of the question.

But Ms. Atkinson also recommended governments should implement deficit reductions plans’ “swiftly” as investors test the Euro region’s effort to contain the Greek crisis. “There have been plans put forward by a number of governments” said International Monetary Fund (IMF) spokeswoman Atkinson. “What’s important is that there should be swift implementation of planned fiscal adjustment by countries.”

The IMF has agreed to partner with European Union (EU) nations to provide Greece with 110 billion Euros in loans over three years to stave off the nation's financial collapse. But fears the bailout package will prove insufficient, and that Greece's debt crisis could spread to other struggling European economies and endanger the Euro, have caused international markets to tumble.

Investors are also watching Spain and Portugal nervously. Standard & Poor's last month lowered Spain's long-term sovereign credit rating to AA from AA+, and Moody's warned this week it was placing Portugal's Aa2 government bond ratings “on review for possible downgrade.”

The fears have pushed the Euro to its lowest rate against the dollar in a year. It continued to fall Thursday, dropping to 1.27 for the first time since March 2009.

Categories: Economy, International.

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