The euro zone will stand behind Greece, which is "under attack" by some investors, French Finance Minister Christine Lagarde said Monday, but the bailout package will require harsh measures "for once" to be adopted by the cash-strapped country.
The euro zone will stand behind Greece, which is "under
attack" by some investors, French Finance Minister Christine Lagarde said
Monday, but the bailout package will require harsh measures "for
once" to be adopted by the cash-strapped country.
Lagarde acknowledged that investors have interpreted the response to the Greek
debt situation as "chaotic," leading to volatility in the euro and a
spiking higher of Greek bond yields as investors have awaited details on a
rescue plan.
But when dealing with 15 sovereign countries being asked to bail out a
struggling one of their own, the process is slow and complicated by local
politics, Lagarde said.
Greek default is off the table, Lagarde said, saying "it will take what it
will take," to rescue
Greece
.
Lagarde said the economic union--based on the common currency--means the euro
zone shares a common fate, and must address the
Greece
situation together, along with the International Monetary Union and the
European Union as a whole.
The IMF, Lagarde said, brings experience dealing with financially stressed
countries.
To drag itself from the brink of default,
Greece
will
have to change markedly, Lagarde said, cutting the salaries of civil servants
by a "significant" amount, slashing public expenses and it must
consider raising the retirement age. The IMF, Lagarde said, will monitor the
implementation of
Greece
's
austerity plan.
That
Greece
got
itself into this situation in the first place is partly because of inaccurate
statistics reported on its budget and budget deficits. For that reason, Lagarde
said, the E.U.'s statistics agency, Eurostat, must have the power to go over
member states' finances with a fine-toothed comb.
The euro zone has been "too complacent" in auditing member states'
books, she said.
Lagarde spoke at a forum entitled "Building a New Financial Order,"
which was held at a Citigroup conference center in downtown
Manhattan
and
organized by BritishAmerican Business, Chatham House and the Foreign Policy
Association.
In building a new financial order in the wake of the global financial crisis,
attention must be paid to balancing economic growth, Lagarde said, with most
growth in the wake of the crisis coming from emerging markets in
Asia
and
Latin
America
, some growth coming from the
U.S.
, with
the euro zone,
U.K.
and
Japan
lagging, she said.
At weekend discussions of the Group of 20 industrialized and emerging nations,
Lagarde said finance ministers called for more balanced growth, based on strong
fundamentals, not just stoking by extraordinary measures enacted to stave
financial crisis.
Growth also requires solid, restored public finances, Lagarde said. Countries
can't keep borrowing from future generations to fuel today's growth, she said.
Meanwhile, financial markets require proper legislation to ensure healthy,
stable growth, Lagarde said. At the G20 and IMF meetings in
Washington
over
the weekend, Lagarde said, finance ministers discussed financial regulation,
though she noted not all countries were on the same page about all regulations.
The E.U. will press hard, she said, for over-the-counter transactions to be
regulated and cleared on open exchanges, referring to these transactions, many
of which include derivatives, as "under-the-counter."
Addressing an IMF push for a global tax on financial institutions, Lagarde said
banks should pay a "franchise price," which could take the form of a
tax, that could be used to fill government coffers to deal with the price of a
possible default.
Διαβάστε ακόμα
Παρ, 11 Οκτωβρίου 2024 - 20:08
Παρ, 11 Οκτωβρίου 2024 - 20:03
Πεμ, 10 Οκτωβρίου 2024 - 19:39
Πεμ, 10 Οκτωβρίου 2024 - 19:36
Τρι, 24 Σεπτεμβρίου 2024 - 19:58