Lagarde, Merkel optimistic Greeks will vote ‘Yes’
July 2, 2015, 5:03 am

The latest opinion polls indicate that Greece may be evenly divided between a yes and no to the July 5 referendum [Xinhua]

Christine Lagarde told Reuters that the Greek economy was on the path to recovery before the snap elections in January which brought the leftist anti-austerity Syriza party to power.

Reform, she said, was critical and a necessary step to turning the economy around before the European Union could consider debt relief and restructuring.

“Given where we are, my suspicion is it would be much preferable to see a deliberate move towards reforms (and) for that to be followed through by the other side of the balance,” Lagarde said.

More importantly, however, Lagarde appeared to reverse track on earlier statements in which she said the Greek government’s July 5 referendum was invalid after June 30.

“I think there is a democratic process that is underway, and that should result in hopefully more clarity, less uncertainty as to what is the determination of the Greek people, and what is the authority of the government,” she said during her interview with Reuters on Wednesday.

Meanwhile, German Chancellor Angela Merkel has ruled out any type of negotiations with the Greek government until after the referendum.

Downplaying the impact of the crisis on Europe, Merkel appears to have placed her bets on the Greeks accepting European austerity measures.

Greek Prime Minister Alexis Tsipras said he would resign if Greeks voted yes to Europe’s bailout criteria.

The most recent polls indicate that Greeks may be evenly divided between a yes and no vote.

But just as Tsipras is under pressure now, so to Merkel who has been criticized by some German political pundits as being soft on the Greeks.

Some have said Germany must reject any bailout plans for Greece because German taxpayers are tired of rescuing Athens yet again.

In Greece, the banks remain closed until after the referendum as automated teller machines (ATMs) begin to run out of cash. Banks have imposed an $80 withdrawal limit from ATMs.

The BRICS Post with inputs from Agencies