IMF head says Greek woes will not hit eurozone

INTERNATIONAL Monetary Fund (IMF) managing director Dominique Strauss-Kahn said yesterday the eurozone would get through the turmoil caused by Greece’s escalating debt crisis without breaking up.

He told Bloomberg in Hong Kong the Greek deficit was a “serious problem”, and added: “But I don’t think that would lead to the fragmentation of the eurozone.”

Despite his comments, the euro fell to a five-month low of around €1.15 yesterday as UK jobs data showed a surprise fall in unemployment last month, boosting the pound.

Greece’s soaring debt has led to fears that it could be forced out of the eurozone and the European Union, threatening the future of the euro area. Greece’s budget deficit is more than four times the EU limit of three per cent of GDP.

EU finance ministers gathered in Brussels on Tuesday called on Greece to take more action. “The fate of one is the fate of all,” said EU economic and monetary affairs commissioner Joaquin Almunia.