Greece 'may turn to IMF'

4 March 2010

Greece may seek assistance from the International Monetary Fund (IMF) if financial backing is not forthcoming from its European neighbours, the country's prime minister has suggested.

George Papandreou and his government have just announced the country's third austerity package in three months – with debt-cutting measures including increases in VAT and taxes on alcohol, fuel and cigarettes, as well as pay cuts for public sector workers.

"We have shown we can take difficult decisions," said Mr Papandreou. "We are waiting for European support - the other side of the agreement."

He has told his cabinet that Greece will turn to the IMF if talks with European countries such as Germany and France do not prove fruitful, reports the Financial Times.

Officials in Germany have already suggested that financial aid for Greece will not be forthcoming at the next meeting between the two nations as it considers the country "to be liquid until the end of March".

Last week, the credit ratings of four of the top banks in Greece were downgraded by Fitch Ratings in response to the crisis.

By Claire Archer

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