28 April, 2010
IMF warned that the crisis in Greece could impact all Europe
Economy & Politics, International Comments (0)
Comunicas.- The head of the International Monetary Fund has warned that the crisis in Greece could spread throughout Europe.
Dominique Strauss-Kahn said that every day lost in resolving Greece's problems risks spreading the impact "far away".
World financial markets, recovering slightly on Wednesday, have been badly hit by fears of contagion from Greece.
Mr Strauss-Kahn was speaking at a news conference in Berlin after trying to persuade reluctant German politicians to back the terms of a rescue deal.
But even as politicians were trying to resolve the crisis, Europe's debt problems were flaring elsewhere.
Standard & Poor's ratings agency delivered more bad news by cutting Spain's rating to AA from AA+.
The agency said Spain's growth prospects were weak after the collapse of a credit-fuelled housing and construction bubble.
Mr Strauss-Kahn's comments foreshadowed S&P's news. "What is at stake today is the economic situation of Greece. But it's more than that.
"We also need to restore confidence... I'm confident that the problem will be fixed. But if we don't fix it in Greece, it may have a lot of consequences on the European Union," Mr Strauss-Kahn said.
Mr Strauss-Kahn, and ECB president Jean-Claude Trichet, were in Berlin to urge German MPs to agree to a rescue deal under which Greece would get billions of euros in loans.