PARIS (MNI) – French Finance Minister Christine Lagarde argued
Sunday against a restructuring of Greece’s debt in order to maintain
pressure on Athens for further budget consolidation.
While officially a candidate for the succession of Dominique
Strauss-Kahn at the helm of the International Monetary Fund, Lagarde is
still a member of the government of Nicolas Sarkozy, who said Friday at
the G-8 summit that the “r” word would not be part of France’s
vocabulary. At the same time, Sarkozy supported Germany’s position that
governments and their taxpayers should not shoulder the full burden of
the financial crisis.
Asked in a radio interview whether restructuring should be
considered as an option for the heavily indebted Greek government,
Lagarde replied: “No. I say it in a very clear way, because we must
imperatively maintain a balance” between financial solidarity in the
Eurozone and adjustment efforts by each government receiving aid.
“In exchange, we expect efforts,” she declared.
Greece has started to consolidate its budget in a big way, the
minister acknowledged. “But it must continue. It must make a number of
privatizations, which unfortunately have not really started to this day.
And then there are structural reforms” of the kind that France has
already launched to liberalize its economy, she added.
Lagarde also explained in more detail than she had in the past her
reasons for resorting to judicial arbitration in the long and costly
litigation with entrepreneur Bernard Tapie, which ended up costing the
French government E285 million. Had the case gone to trial, the
government might have lost as much as E7 billion, she asserted.
The French public prosecutor has demanded an investigation into the
minister’s role in the decision — a Damocles sword hanging over her
candidacy for the IMF.
“My conscience is perfectly tranquil,” Lagarde reiterated.
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