UPDATE 1-High rates would cripple Greece -IMF official in paper

(Adds quotes, background)

PARIS, April 20 (BestGrowthStock) – Lending bail-out funds to Greece
at high interest rates would make an economic recovery
impossible, the chief economist of the International Monetary
Fund said in a newspaper interview published on Tuesday.

IMF Chief Economist Olivier Blanchard also said the Group of
20 nations should focus on reducing their own debt and deficit.

“Of course, Greece must tighten its belt to pull itself out
of the trouble it got itself into,” Blanchard said in the
interview in Le Monde newspaper.

“But lending it rescue funds at high interest rates doesn’t
make sense, because it would make a recovery impossible.”

Earlier on Tuesday, Germany said the euro zone would provide
financial help to Greece in the form of pooled loans should this
be required. It ruled out the idea of buying Greek bonds.
[ID:nBAT005307]

European Central Bank Governing Council member Axel Weber
said Greece may need assistance of up to 80 billion euros
($107.7 billion) to avoid default, the Wall Street Journal
reported. [ID:nLDE63J0FY]

Blanchard said worsening budgets due to the financial crisis
were posing the risk of a vicious circle of exploding debt and
rising risk premiums and interest rates.

“That’s why we have to concentrate on fiscal consolidation.
With more or less urgency depending on the country,” he was
quoted as saying.
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($1=.7431 Euro)
(Reporting by Sophie Hardach; editing by Stephen Nisbet)

UPDATE 1-High rates would cripple Greece -IMF official in paper