Markets tumble as IMF delays assistance to Greece
International Monetary Fund Managing Director Christine Lagarde said she will make a recommendation on Greece's next aid payment after that country's referendum in five weeks.
German and French leaders said that until the ballot, an already delayed aid installment of 8 billion euros will remain on hold. The referendum on Dec 4 or 5 causes fears that it might lead to a euro exit.
"As soon as the referendum is completed, and all uncertainty removed, I will make a recommendation to the IMF Executive Board regarding the sixth tranche of our loan to support Greece's economic programme," Lagarde said in an e-mailed statement. It was issued in Cannes, France, where the G-20 Summit will begin later today.
“I remain convinced that the agreement reached by the leaders of the Euro Area at their Summit last week, which includes a substantive reduction in Greece’s debt burden and additional financial support for a new ambitious program, will greatly benefit Greece by helping to restore growth and create jobs. I welcome the Prime Minister’s indication that the referendum which has been announced will take place as soon as possible so that the Euro Summit agreement can be implemented expeditiously," Lagarde said.
Greek Prime Minister George Papandreou on Monday called for a confidence vote and a referendum on last week's EU deal to resolve the nation's debt crisis. In this effort, he sought to squelch opponents in his own party, by putting the terms of the next aid package to voters weary of two years of budget cuts and tax increases. This sparks a fierce global sell-off on world stock markets on Tuesday as this adds uncertainty to the euro. Already suffering from negative news on floods, the Stock Exchange of Thailand on Thursday shed 8.24 points to 0.85 per cent, to 957.56 points.
