Greece might quit euro, says Lagarde: IMF chief remarks are starkest warning yet country will be force to abandon currency if it cannot meet its debts

By Peter Campbell for the Daily Mail 29 May 2015

• Greece could leave Euro head of the International Monetary Fund warned

• Christine Lagarde’s remarks are the starkest warning yet that Athens will be forced to abandon the single currency if it fails to repay its debts

• But she added that the single currency would ‘probably’ survive Greek exit

Greece could leave the Euro, the head of the International Monetary Fund warned publicly yesterday.

Christine Lagarde’s surprisingly unguarded remarks are the starkest warning yet that Athens will be forced to abandon the single currency if it fails to repay its debts.

But she added that the single currency would ‘probably’ survive a Greek exit – known as a ‘Grexit’ – from the euro.



Christine Lagarde’s (pictured) remarks are the starkest warning yet that Athens will be forced to abandon the single currency if it fails to repay its debts but she said the Euro could probably survive Grexit

With Britain set to hold a referendum that could see it leave the EU within two years, experts last night said chinks were beginning to show in the European project.

Athens must repay £1.1billion to a host of lenders by the end of the month or risk bankruptcy.

The deadline had originally been June 5, but was yesterday pushed back again as both sides are locked in talks.

Greece has to make the repayments in order to unlock £5billion of bailout money, which it needs to keep paying public wages.

Without the money, the country has said it will default on its debts – a move that many believe will force it to leave the single currency.

But after four months of talks with the IMF, the European Central Bank and the European Commission, Greece is no closer to an agreement that would allow it to get the money.

Its lenders have been growing increasingly frustrated at the far-left government Syriza’s unwillingness to impose spending cuts and trim public sector pensions.

Speaking during a crisis meeting among G7 finance leaders Mrs Lagarde yesterday said: ‘It's very unlikely that we will reach a comprehensive solution in the next few days.’



A group photo at the G7 meeting of Finance Ministers in the Royal Palace in Dresden,Germany


She added: ‘A Greek exit is a possibility.’

But she said an exit would ‘probably not be an end to the euro’.

The European Central Bank yesterday warned that the risk of Greece defaulting on its debts had ‘increased sharply’ in recent days.

Greek interior minister Nikos Voutsis warned over the weekend that Athens does not have the money to make the repayments.

He said: ‘This money will not be given and is not there to be given.’

Stock market commentator David Buik from Panmure Gordon yesterday accused Christine Lagarde of ‘sabre-rattling’.

He said: ‘Chancellor Merkel and the bunch of irresponsible EU politicians need to realise that Greece is broke, and that hell has a better chance of freezing over than Greece has of maintaining its financial status.

‘To let them go shows that the European dream is over.

‘If you want the European dream to work you’re going to have to swallow it, write off their debts and stop wasting our time.’

Robert Oxley, campaign director for Business for Britain, said: ‘A Greek exit from the euro would not only send shock waves throughout the continent, it would demonstrate the fundamental flaws in the single currency, which have yet to be addressed.’

The Chancellor previously warned that a ‘Grexit’ would have ‘very serious consequences’ for Britain’s economy.

The former head of the US central bank Alan Greenspan has also said Greece would be forced out of the euro if it defaulted.

Speaking in February, he said: ‘Greece’s position is if they don’t get additional loans they will default and leave the Euro.

‘I don’t see any people willing to put in their funds having been disappointed so often.’



Greece might quit euro, says Lagarde | Daily Mail Online