Business News

Lagarde: IMF ready to assist Greece ‘if requested’

Managing Director of the International Monetary Fund Christine Lagarde has said the global crisis lender is “ready to assist Greece if requested”.

“The IMF has taken note of yesterday’s referendum held in Greece. We are monitoring the situation closely and stand ready to assist Greece if requested to do so,” Ms Lagarde said in a brief statement.

In yesterday’s referendum, more than 61% of Greeks rejected creditor demands for further austerity in return for more bailout funds, a victory for the radical leftist Syriza’s government that took office five months ago.

Kenny says Greece will have to ask for third bailout

Earlier, the head of the European Union’s finance ministers said Greece’s ‘No’ vote has made discussions with its creditors more difficult, but the aim remains to keep the country in the eurozone.

“It doesn’t bring us closer to a solution right away. In fact, when proposals are rejected that only makes things more difficult,” Eurogroup head Jeroen Dijsselbloem told reporters.

Mr Dijsselbloem said keeping Greece in the euro zone “is still their objective and mine.”

Mr Dijsselbloem, who is also Dutch finance minister, said the Dutch government would discuss a Greek request for additional emergency funding under the European Stability Mechanism.

Despite his comment Germany had earlier said there is currently “no basis” for talks with Greece on a new bailout package or debt relief.

“In light of yesterday’s decision by Greek citizens, there is no basis to enter into negotiations on a new aid programme,” German Chancellor Angela Merkel’s spokesman Steffen Seibert said.

He said: “It is up to Greece to make something of this. We are waiting to see which proposals the Greek government makes to its European partners”.

Regarding requests by Athens to restructure its debt, finance ministry spokesman Martin Jaeger said: “I can see no reason to enter into discussions.”

Eurogroup ministers have said they expect fresh reform proposals from the Greek government in talks tomorrow.

The Eurogroup said in a statement that ministers will discuss the situation following the referendum.

This morning Greek Finance Minister Yanis Varoufakis announced his resignation.

In a statement, released via his twitter account, Mr Varoufakis said he had been “made aware” that some members of the eurozone considered him unwelcome at meetings of finance ministers, “an idea the prime minister judged to be potentially helpful to him in reaching an agreement”.

“For this reason I am leaving the ministry of finance today.”

He said he considers it his duty “to help Alexis Tsipras exploit, as he sees fit, the capital that the Greek people granted us through yesterday’s referendum.

“And I shall wear the creditors’ loathing with pride”.

Mr Varoufakis added: “The superhuman effort to honour the brave people of Greece, and the famous OXI (NO) that they granted to democrats the world over, is just beginning.”

Greece’s chief negotiator in talks with international creditors, Euclid Tsakalotos, is the government’s top candidate replace Mr Varoufakis, a senior government official said.

Mr Varoufakis’ successor is due to be named after a meeting of political leaders that got under way at 8am Irish time.

European stock markets continued to see losses this afternoon.

The Frankfurt DAX index was down 1.5% just after 2pm, while the Paris CAC dropped 1.9% and London’s FTSE 100 index fell 0.7%. The Dublin market was also down 1.1% this afternoon.

Ms Merkel and French President Francois Hollande are to meet in Paris today to discuss the situation in Greece.

The European Central Bank is to hold a conference call to decide on funding for Greek banks which are rapidly running out of money.

Leaders of eurozone countries are to meet tomorrow to discuss the crisis.

The British government said it will do “whatever is necessary to protect our economic security at this uncertain time”.

France’s European Affairs minister Harlem Desir has said the Greek vote does not indicate a desire to leave the euro and that talks with Greece should start soon “on a serious basis”.

He said Mr Tspiras must make it clear what he wants to do with the referendum No vote.

Greece in uncharted waters after vote

Some of the possible contenders cited in Greek media include Euclid Tsakalotos, the coordinator of negotiations with Greece’s lenders, and Economy Minister George Stathakis.

Greeks overwhelmingly rejected conditions of a rescue package from creditors in a referendum yesterday, throwing the future of the country’s eurozone membership into further doubt and deepening a standoff with lenders.

The euro and stock prices fell sharply at the market open in Asia this morning but then recovered some of their losses, with dealers emphasising that markets were orderly and showing no signs of financial strain.

The vote leaves Greece in uncharted waters, risking a banking collapse that could force it out of the euro.

Without more emergency funding from the ECB, Greece’s banks could run out of cash within days after a week of rising desperation as banks shut and cash machines ran dry.

For millions of Greeks the outcome was an angry message to creditors that Greece can no longer accept repeated rounds of austerity that, in five years, had left one in four without a job and shrank the economy by a quarter.

The Greek prime minister has denounced the price paid for aid as “blackmail”, and a national “humiliation”.

With Greece facing its worst financial crisis in recent memory, Mr Tsipras said in a televised address that Athens was returning to the negotiating table with the express goal of reopening banks.

The ECB, which holds a conference call today, is likely to maintain emergency funding for Greek banks at their current restricted level and avoid the drastic measure of pulling support, sources said.

Even then, the banks are expected to struggle as Greeks besiege cash machines to withdraw a maximum of €60 daily, though government officials have vociferously denied any plans to issue a parallel currency.

Fears have also grown of a shortage of petrol and medicine if the cash squeeze continues.

Unable to borrow money on capital markets, Greece has one of the world’s highest levels of public debt.

The IMF warned last week that it would need massive debt relief and €50bn in fresh funds.

Opinion polls over the months have shown a large majority of Greeks want to remain in the euro.

But many appear to have shrugged off the warnings of disaster, trusting that a deal can still be reached without the tax hikes and pension reform demanded by lenders and rejected by Mr Tsipras.

The Minister of State for European Affairs said a new deal will have to be reached with Greece.

Speaking on RTÉ’s Morning Ireland, Dara Murphy said the position before and after the vote remained the same.

He said that Ireland was aware of the difficult circumstances experienced by the Greek people and that the Irish position had always been that debt relief would have to be part of any proposed agreement, as long as reforms were introduced.

Mr Murphy said the fact that Mr Tsipras wished to return to negotiations was important, but he said he regretted that Greek ministers continued to use “inflammatory language”.

Meanwhile, Minister of State at the Department of Finance Simon Harris has said the Irish government is in favour of a re-profiling and restructuring of Greek debt.

He told RTÉ’s News At One that Ireland is not, however, in favour of a debt write-down, adding that the Greek government has not asked for this.

He said Ireland is an example of re-profiling and the Government can speak with credibility and authority on this issue.

Mr Harris said if the Greek government is ready to engage, and a programme of assistance is offered, it is appropriate the Greek government deliver a programme of reform.

He said that it is too early to say whether the funds for a possible Irish contribution of €1bn would come from the ESM or elsewhere, saying that no plans have been made.

Article Source:

< Back to Business News