IMF MD head to Germany
IMF managing director Christine Lagarde holds a news briefing at the International Monetary Fund headquarters in Washington July 6, 2011. IMF managing director Christine Lagarde holds a news briefing at the International Monetary Fund headquarters in Washington July 6, 2011.
Amid fears in financial markets that Greece's bailout programme is in danger of unraveling, International Monetary Fund managing director Christine Lagarde was set to hold talks Tuesday evening in Berlin.
International officials have warned that commercial bondholders must forgive more than a nominal 50 per cent of their loans to Greece if Athens is to avoid bankruptcy. The crisis has helped drive the euro to a 16-month low and weighed on global stocks on Monday.
Lagarde was to meet with German Chancellor Angela Merkel, who, the previous day, urged bondholders and Athens to reach agreement. No news conference was scheduled before or after their meeting.
The two were also scheduled to discuss the outlook for non-eurozone Hungary, which is in danger of defaulting on debts.
As turmoil returned to the markets this week, investors sought safe havens for their money.
Banks lodged a record sum, 481.94 billion euros (628.4 billion dollars), overnight with the European Central Bank, the ECB said. It was the third record in three days, the highest sum to parked at the ECB since the euro was introduced in 1999. Monday's holdings were 463.57 billion euros.
On Monday, investors began to essentially pay Germany to hold their money, bidding a negative interest for 3.9 billion euros of six-month bonds.
Germany's main stock index, the DAX, climbed 2.5 per cent to 6,167 in morning trading as some confidence returned on an upbeat report from US ratings agency Fitch, which said it did not regard a credit downgrade for France as likely this year.
Merkel, who hosted a visit Monday by French President Nicolas Sarkozy, was scheduled to meet Wednesday with Italian Prime Minister Mario Monti. Merkel cast her weight behind a controversial plan being enacted by Sarkozy to rapidly introduce a tax on financial transactions.
Her backing for the tax, in the 17 eurozone nations only, which she described as her “personal” stance, triggered a dispute with the pro-business junior party in her ruling coalition, the Free Democrats, who oppose the tax unless it includes Britain, the home of Europe's largest financial market. - Sapa-dpa