The chief of the International Monetary Fund (IMF) has said that the debt crisis in Greece may spread to other parts of Europe in an interview with French, Le Parisien newspaper.
IMF Chief, Dominique Strauss-Kahn : Greek debt crisis may spread to other European country's
Dominique Strauss-Kahn chief of the IMF has stated that Greek economic crisis may spread to other parts of Europe while major players such as France and Germany should be safe from the threat.
Dominique Strauss said “There is always a risk of contagion, Portugal has been mentioned, but it is already taking measures and the other countries are in a much more solid situation, but we should remain vigilant.”
Financial markets were gripped by renewed selling on Tuesday as there were renewed distress signals over the 110 billion Euro IMF/EU rescue package for Greece as some believe it would not be enough to stop the crisis from spreading to other countries.
Other countries who are not at risk was not specified by Strauss-Kahn.
European countries were happy of the new package for Greece, but there were criticisms as Greece must pay 5% interest on the loan. Officials and politicians believe the loan should have been at a lower rate.
Strauss-Khan said on the matter “I think the rate at which the Europeans lent should have been equal to that of the IMF, which is lower by more than half a point. But I think we could have made a greater effort, because a less expensive lending rate (we have), the more we help the Greeks,”.
The Greek residents however were very angered by the involvement of the IMF or a loan deal which would make Greece go into further debt in which the IMF chief has responded by saying, the loan deal is to save the Greek nation but he understood the anger of the people.
Strauss-Kahn said “It was on the edge of bankruptcy and soon it would not have been able to pay its civil servants.”
