Tags: EU | Greece | Financial | Crisis

Greece: May Turn to IMF If EU Fails to Deliver Aid

Wednesday, 17 Mar 2010 11:14 AM

Greece could seek IMF funding to help overcome its debt crisis if its EU partners do not provide "clear support" next week, a government spokesman said Wednesday.

George Petalotis said the March 25-26 European Union summit on how to deal with a potential bailout for Greece will be crucial, as the country struggles to reduce a bloated budget deficit and public debt.

"I believe the summit is when it will become evident whether the European partners want to support a country ... or whether we have to resort to some other solution," Petalotis said.

"We are making a very big effort to achieve our targets, so as to secure clear support from the European Union in order not to have to go to the International Monetary Fund," he told Greece's Channel 1 radio. "But if the borrowing conditions, when we need to borrow, are not expected to be those that we want, (IMF funding) is a possibility which we certainly can follow."

A eurozone member knocking on the IMF door would be unprecedented and deeply embarrassing for the 16-nation bloc.

Eurozone finance ministers have pledged help — but never laid out firm details or an amount. They said Tuesday that they'd agreed to bailout Greece with individual loans from each country if it needs it.

Greece's debt crisis emerged late last year when the country abruptly revised up its deficit figures, alarming the EU and hammering the common currency as markets feared contagion to other weak southern economies.

Under intense pressure from Brussels to sort out its finances, Athens has announced a 16 billion euro ($22 billion) austerity program through public sector salary cuts, pension and hirings freezes and higher consumer taxes.

The cutbacks have triggered union anger, with two major demonstrations in Athens this month degenerating into street riots. State power corporation workers launched a two-day strike Tuesday — creating minor blackouts throughout the country — while taxi drivers and petrol station owners will be on strike Thursday.

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