The International Monetary Fund pushed European policy makers to consider writing off some aid to Greece, widening the fight to keep the 17-nation euro zone from splintering.
“The Greek debt will have to be addressed,” IMF Managing Director Christine Lagarde said in Washington yesterday. The IMF has indicated that additional aid for Greece will have to come from Europe, suggesting that the euro area may need to consider losses on bonds held by the European Central Bank or loans extended by governments.
Greece's financing gap won't be solved with the budget measures being discussed because its growth prospects are too weak, Lagarde said at the Peterson Institute for International Economics in Washington. She said efforts to find 11.5 billion euros ($15 billion) in additional savings won't be enough to shore up the bailout jointly supervised by the IMF, the European Commission and the ECB.
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