Don't fear IMF, fund leader tells Greece

April 24, 2010 at 8:09 PM   |   Comments

WASHINGTON, April 24 (UPI) -- Greece has no reason to fear the International Monetary Fund's intervention to help revive its ailing economy, the fund's managing director said Saturday.

Dominique Strauss-Kahn said the IMF, which is expected to lend Greece as much as $20 billion as part of a bailout, will help the country move toward recovery, not impede it, The Daily Telegraph reported.

"Greek citizens shouldn't fear the IMF; we are there to try to help them," Strauss-Kahn said.

George Papaconstantinou, the Greek finance minister, met Friday with Strauss-Kahn and the EU economy commissioner, Olli Rehn, about the loan package, the Telegraph said.

Greece's economic plight has dominated discussion as world financial leaders gather in Washington for three days of meetings on the global economy.

IMF officials also are urging people in the United States and other developed countries to work longer before retirement, pay higher taxes and expect less from the government, The Washington Post reports. And cheap imports carried by huge chains like Wal-Mart and Target need to be more expensive, the IMF officials say in policy papers and statements on the strategy to keep the world economy growing and prevent another "great recession."

The IMF's strategy would affect labor rules, product prices, currency values and the "social contract" between governments and aging citizens, the Post said.

"It is not that living standards will lower, but they will not increase as fast as they have been," said Domenico Lombardi, a former IMF executive director. The ideas being discussed by world leaders like "rebalancing" and "fiscal consolidation" are "coded words," he said, adding, "They don't like words like 'imposing higher taxes' and 'cutting spending.'"

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