Wednesday, May 16, 2012

IMF prepares for a 'messy' Greek exit from the euro as Hollande and Merkel discuss fate of single currency

The International Monetary Fund was today preparing for Greece to leave the euro as talks to form a coalition government finally collapsed.

IMF head Christine Lagarde said it had to be ‘technically prepared for anything’ after Athens confirmed that fresh elections would be held next month.

Mrs Lagarde, whose organisation is underwriting the Greek bailout, warned such a move would have untold consequences for world finances.

She said: ‘The spillover effects, the chain of consequences are very difficult to assess. We can certainly assume that it would be quite messy.’

The Treasury confirmed that it was keeping British contingency plans for a Greek exit of the euro – dubbed ‘the Grexit’ – under active review.

Some Greek ministers have warned leaving the euro could spark ‘civil war’. Read More