Christine Lagarde, head of the International Monetary Fund (IMF) warned Greece about the consequences of a Greek debt restructuring after the January 25 elections where anti-memorandum SYRIZA is in the lead.
The leftist political party, SYRIZA, claims that if elected with a majority vote in the Parliament, they will put a stop to the austerity measures that have been enforced under the bailout program. Meanwhile, they wish to renegotiate the Greek debt with the lenders and other Eurozone members. SYRIZA leader Alexis Tsipras called for “solidarity” in helping Greece cut its debt.
“As a principle, collective endeavors are welcome but at the same time a debt is a debt and it is a contract,” IMF Managing Director Christine Lagarde told The Irish Times in an interview on Monday when asked about the general idea of holding a debt conference.
“Defaulting, restructuring, changing the terms has consequences on the signature and the confidence in the signature,” she said, while also adding that Greece’s debt pile may not be sustainable.
“We certainly hope that the ECB continues to support the recovery in Europe. It is needed. It cannot be the only one to do it but it has to do what it has to do,” she said, ahead of the ECB policy meeting on Thursday.
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