May 15, 2012 / 3:52 PM / 7 years ago

IMF's Lagarde says must be prepared for Greek euro exit

PARIS (Reuters) - IMF chief Christine Lagarde said on Tuesday that it was important to be technically prepared for the possibility of Greece leaving the euro zone, warning that its exit would be “quite messy”.

Asked in an interview on France 24 television whether Greece could leave the euro zone, Lagarde replied: “We certainly don’t hope so, from the IMF point of view ... but we have to be technically prepared for anything”.

Responding to a question about the fallout from a possible Greek exit, she said: “You have consequences on growth, you have consequences on trade and you have consequences on financial markets ... You can certainly assume it would be quite messy.”

Lagarde said that the European Central Bank had room to manoeuvre on interest rates and could use it.

Ahead of a crunch meeting between France’s new President Francois Hollande and German Chancellor Angela Merkel in Berlin on Tuesday to discuss his calls for tempering austerity in Europe, Lagarde expressed confidence the pair would reach a compromise.

“Austerity and growth are not mutually exclusive and they need to be addressed jointly,” she said.

Reporting by Daniel Flynn and Leigh Thomas

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