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25 May 2012

Guardian: Lagarde to Greeks - It's payback time: don't expect sympathy


The IMF has increased the pressure on crisis-hit Greece. In an uncompromising interview with the Guardian, IMF managing director, Christine Lagarde, insists it is payback time for Greece and makes it clear that the IMF has no intention of softening the terms of the country's austerity package.

She said Greek parents have to take responsibility if their children are being affected by spending cuts. "Parents have to pay their tax", she says. Greece, which has seen its economy shrink by a fifth since the recession began, has been told to cut wages, pensions and public spending in return for financial help from the IMF, the European Union and the European Central Bank.

Lagarde, predicting that the debt crisis has yet to run its course, adds: "Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax." She says she thinks "equally" about Greeks deprived of public services and Greek citizens not paying their tax.

The intervention by Lagarde comes after the caretaker Greek government met to discuss a sharp fall in tax revenues – down by a third in a year. Under the terms of the country's bailout, Athens has agreed to improve Greece's poor record for tax collection in order to reduce its budget deficit, and Lagarde's remarks are evidence of a growing impatience in the international community. Reports surfaced in Germany and France of preparations being made to cope with Greece's possible departure from the single currency after its election on 17 June.

Belgium's deputy prime minister, Didier Reynders, said it would be a "serious professional error" if central banks and companies did not prepare for an exit.

Full article



© The Guardian


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