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Could Greece really exit the Eurozone?
May 29, 2015, 1:28 pm

International Monetary Fund chief Christine Lagarde has said that the Eurozone would survive if Greece were to be thrown out of the bloc [AP]

International Monetary Fund chief Christine Lagarde has said that the Eurozone would survive if Greece were to be thrown out of the bloc [AP]

The International Monetary Fund has brought the brunt of its power to bear this week warning Greece that it could be thrown out of the Eurozone if negotiations over repayment and restructuring of its massive debts fail.

IMF chief Christine Lagarade told German media this week that she did not wish to see Greece out of the Eurozone but that it was a possibility if Athens failed to reach an agreement on the repayment of 1.6 billion euros ($1.76 billion) in June.

The repayment would ensure that Greece continues to receive bailout loans of $7.2 billion from the IMF and the European Central Bank (ECB).

Although the Greek government has assured the country that it is confident that it can reach a deal by May 31, Greek Interior Minister Nikos Voutsis said that it was unlikely that Athens would pay the 1.6 billion euros in June unless its creditors agreed to its restructuring timetable.

Voutsis is part of the Greek leftist government, which won the January general elections largely on a platform promise to aggressively restructure its ECB and IMF bailout debt; it has previously indicated that it wanted a delay in repayment schedules.

It has said that it wants a political – rather than financial – solution and insists any negotiation over Greek economic reform should be considered at the heads of state level, not among finance ministers.

Athens has also said that “The more our [EU] partners want austerity, the more the problem with the debt will get worse”.

The talks have now entered their fourth month.

But Lagarde told German daily Allgemeine Zeitung that she doesn’t feel a deal will be reached by Sunday.

Greek media has for the past several weeks voiced popular calls for the country to remain in the EU and the Eurozone. But some officials have been calling on the government to begin to prepare the Greek people for the possibility that an agreement will not be reached – meaning that its exit could be imminent.

Greek Finance Minister Yanis Varoufakis has repeated that Athens has met its creditors “three-fourths” of the way on a finance settlement and that it was now up to the IMF and ECB to compromise.

He told the BBC that a Greek exit from the eurozone would be catastrophic and mark the end of the common currency.

But Lagarde dismissed Varoufakis’ warnings and said the eurozone would survive Greece being thrown out of the bloc.

The BRICS POST with inputs from Agencies

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