BRUSSELS (MNI) – The following is the text of a statement by IMF
Managing Director Christine Lagarde on the Eurozone Leaders’ Summit
issued early Thursday morning:
“I welcome the steps taken today by the Eurozone Leaders toward
establishing a comprehensive framework to address the crisis facing the
region, and I am encouraged by the substantial progress made on a number
First, on Greece, the agreement reached on key parameters for
private sector involvement is of the utmost importance to improve debt
sustainability. It is based on a realistic assessment of the Greek
economy and an appropriate burden-sharing between the private and
More immediately, I intend to recommend approval to the IMF’s
Executive Board of disbursement of the next tranche of our loan under
the current program. The continued commitment of the Greek authorities
to implement agreed economic reforms remains, of course, paramount.
Second, the decision to leverage the capacity of the European
Financial Stability Facility (EFSF), including through the use of new
Special Purpose Vehicles (SPVs), can strengthen Europe’s defenses
against contagion and help ensure the proper functioning of the
sovereign debt market. In the period ahead, it will be important to
detail further the modalities of how this enhanced EFSF will operate and
deliver the scale of support envisaged.
Third, the agreement reached on a coordinated mechanism to
recapitalize banks and strengthen their funding is a major step forward.
Restoring growth depends on a financially sound banking sector and
reinforcing the banks’ capital buffers is key. This should be achieved
mainly through the provision of additional capital and not by lower
lending within or across countries.
Fourth, I welcome the decisions to strengthen economic and fiscal
coordination within the euro area and the commitment to make the
economic union commensurate with the monetary union.
Finally, I can assure you that the IMF will continue to play its
part in supporting the efforts made today to address the challenges
facing the Euro Area and to restore growth to its full potential.”
** Market News International **