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Lagarde's Grexit comments cause a stir

Friday, May 29, 2015 - 01:48

A German newspaper which quoted IMF Chief Christine Lagarde as saying ''A Greek exit is a possibility'' - later changed the quote to ''Nobody would wish a Grexit on the Europeans,'' amid conflicting reports and increasing nervousness over whether Greece is about to secure a cash for reforms deal. Kirsty Basset reports.

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German bund futures spiked higher on Friday after IMF Chief Christine Lagarde was quoted as saying "A Greek exit is a possibility." The quote was later changed to "Nobody would wish a Grexit on the Europeans." Newspaper Frankfurter Allgemeine Zeitung did not explain why it changed the quote. But it underlined nervousness surrounding Greece's debts, and uncertainty over whether it will be able to make looming payments to the IMF and ECB At the G7 in Dresden, U.S. Treasury Secretary Jack Lew weighed in. (SOUNDBITE) (English) U.S. TREASURY SECRETARY, JACK LEW, SAYING: "It is in everyone's interest for this to be resolved, and for it to be resolved as quickly as possible. There is the possibility that June 5th is not the real deadline, that there is a later date in June. But what we know for sure is that you keep raising the risk of an accident if you put off the action until whatever the next deadline is." German Finance Minister Wolfgang Schaeuble was also at the G7 - he said Athens' optimism over reaching a deal soon - is not reflected in talks with creditors. Greece had expressed hope a deal would be reached by Sunday. David Stubbs says that's unlikely, and believes there are still weeks left of posturing and brinkmanship. He also says watching whether Greece meets its payments to the ECB will be crucial. (SOUNDBITE) (English) JP MORGAN GLOBAL MARKET STRATEGIST DAVID STUBBS SAYING: "It's the ECB which is supporting the Greek banking system. If you start to default to the entity that's holding up your banking system, that's when things get really bad for Greece." Meanwhile, ECB data showed Greek bank deposits have fallen to their lowest level in a decade. In Athens, these pensioners queue outside the banks, fearful they may not get their pensions, as state money and time runs out.

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Lagarde's Grexit comments cause a stir

Friday, May 29, 2015 - 01:48