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IMF Mum On Possible Papandreou Resignation

The International Monetary Fund declined to comment on speculation that Greek Prime Minister George Papandreou may resign Thursday, insisting uncertainty in the country must be removed before the fund makes a decision on more financing for the struggling country.

IMF spokesman David Hawley refused to weigh in on overnight political developments in Greece, including reports Papandreou may seek to form a national-unity government. The IMF is currently mulling whether to release a sixth round of financing to Greece, and fund Managing Director Christine Lagarde said Wednesday in a statement that she would wait until “all uncertainty” is removed before recommending whether to follow through with the loans.

“Our programs are with countries,” Hawley said. “If the authorities .. in any country continue to implement the program agreed to with the fund, then the fund is in a position to continue the program.”

Lagarde is currently in Cannes, France, joining other world leaders at the Group of 20 meetings where the political volatility in Greece and the broader euro-zone crisis are the primary topics of discussion. Concerns have grown in recent days that an accord reached last week to cut Greece’s debt burden and bolster European banks may not come to fruition after Papandreou called for a surprise referendum by Greek voters on the deal.

Hawley also said the IMF welcomes the move Thursday by the European Central Bank to cut interest rates.

“We fully support the interest-rate reduction announced this morning, which reflects the decrease in inflationary pressures and the intensified negative outlook for the euro zone,” he said at a briefing in Washington.
(source: Dow Jones)

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