IMF Chief Urges EU Leaders to Proceed With Financial Recovery Plan

Posted November 2nd, 2011 at 6:05 pm (UTC-5)
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APExpress 4 – 11/2/2011 4:31:00 PM – AP-APTN-2030: France G20 Arrivals 2

International Monetary Fund director Christine Lagarde has urged European Union leaders to stick to the agreed plan to deal with the eurozone crisis despite Greece's decision to hold a referendum on the issue.

Lagarde said she had seen a real determination among European partners to implement the agreement on a new bailout package for Greece reached on October 27. She said the bloc should go ahead with the plan despite Greece's surprise referendum announcement.

Key European leaders held strategic talks Wednesday as they prepared for a meeting with Greek Prime Minister George Papandreou later in the day. Mr. Papandreou angered his European counterparts with his unexpected call for a Greek vote on last week's plan to resolve eurozone's financial crisis. The plan includes tough austerity measures for Greece.

French President Nicolas Sarkozy, German Chancellor Angela Merkel and other European leaders met with Mr. Papandreou in Cannes, France, to press for Greece's rapid implementation of austerity measures.

European Commission President Jose Manuel Barroso warned of a much more painful fallout if Greece were to back out of the rescue plan.

No date has been set for the referendum and it is not clear what the Greek voters would be asked.

French Prime Minister Francois Fillon told parliament that Europe cannot be kept waiting for weeks for the outcome of Greece's referendum. He said the Greeks must say quickly and without ambiguity whether they choose to keep their place in the eurozone or not.

The meeting Wednesday took place ahead of the G20 summit in Cannes.

Greece is not a member of the G20 group of leading and emerging economies, but Mr. Papandreou's referendum plan has become the summit's central issue.

The call for the Greek vote sent panic through world stock markets plunging Tuesday.

The agreement reached last week calls for banks to forgive $140 billion in Greek debt to help stabilize its precarious finances. But the Greek people have protested loudly, and sometimes violently, against the austerity measures demanded by international creditors.

Greek Cabinet ministers have given their support for Mr. Papandreou's referendum plan. But whether he can survive Friday's scheduled confidence vote in Parliament remained in question.