UPDATE 3-Euro zone must avoid piecemeal solution -IMF chief

* Euro zone needs comprehensive approach to debt crisis

* Must avoid piecemeal solution

* Risk of division of Europe

* Greece on right track but still needs hard work

(Adds quotes, protests, background)

By Ingrid Melander and Harry Papachristou

ATHENS, Dec 7 (BestGrowthStock) – The euro zone needs a
comprehensive solution to the debt crisis rocking the group and
must avoid a country-by-country approach, the head of the
International Monetary Fund said on Tuesday.

Dominique Strauss-Kahn’s call during a visit to Greece —
the first euro zone country rescued by an EU/IMF bailout — came
after euro zone ministers on Monday resisted IMF calls to do
more to quell the currency bloc’s debt crisis. [ID:nLDE6B60CJ]

He said there was a risk of Europe becoming divided, and
urged it to agree more coordinated policies.

“The euro zone has to provide a comprehensive solution to
this problem. The piecemeal approach, one country after another,
is not a good one,” Dominique Strauss-Kahn told reporters after
meeting Greek Prime Minister George Papandreou.

European bond markets remained tense on Tuesday, following a
decision after a five-hour meeting by the bloc’s 16 finance to
take no new measures to tackle the threat of contagion, arguing
the existing emergency fund was sufficient.

Before Monday’s meeting, the IMF had urged the ministers to
increase the size of a 750 billion euro ($1 trillion) bailout
mechanism for debt-stricken states and suggested the European
Central Bank step up purchases of government bonds.

Asked by a Greek lawmaker during his visit to Athens if
there was a risk that Europe will be split into two parts,
Dominique Strauss-Kahn said: “There is a risk…There are
different growth rates in different areas of the euro zone.”

But he added, speaking through a Greek interpreter, that he
saw no risk of Germany exiting the euro zone because it was
dedicated to the common currency.

And he said he was optimistic the euro zone would eventually
do the right thing to address its debt woes.

“It’s not a huge problem for the euro zone. I don’t agree
with those who say that the future of the euro zone is at stake
but it’s a problem that has to be addressed,” he said.

“I think this problem will be solved, it takes time because
institutions in the European system probably need to be a little
improved to be able to react faster to crisis … The right
decisions have been made in the past and I’m confident that at
euro zone level the right decisions will be made.”

He said sluggish European growth and recovery was an even
more serious problem: “Nobody would be talking about debt crisis
if there was high growth in Europe. The question is growth,
growth, growth, not only growth for the sake of growth but
growth for jobs,” he said.


Strauss-Kahn praised Greece for fiscal progress made in
exchange for a 110 billion euro IMF/EU bailout and said the
debt-ridden country must do even more to restore growth, reform
the labour market and fight tax evasion.

During his visit, hundreds of pensioners marched through
Athens chanting “Hands off our pensions” to protest against his
visit and thousands of civil servants were planning to take to
the streets later on Tuesday.

In a separate protest rally, about 6,000 gathered near
parliament as he spoke to lawmakers. The protesters burned
hanged effigies of the IMF and the ruling PASOK party.

“His presence here is not welcome,” a senior public sector
union official, Ilias Iliopoulos, told Reuters. “The austerity
measures the IMF prescribed will not help us exit the crisis.”

Strauss-Khan told reporters the IMF should not be vilified
because it was in Greece to help.

“Many people in Greek society believe we’re the bad guys …
Some say the well-known ‘IMF go home’. But believe me, you are
better off with us here than with us at home,” he said.

Workers at trains, buses and the metro will walk off the job
for 24 hours on Wednesday and march to the ministry of finance
in Athens to protest against the planned consolidation of state

The IMF chief said he was confident Greece would deliver on
the reforms and return to growth. “I am confident, I believe
growth will come back rather soon, (maybe at) the end of 2011,
certainly the beginning of 2012.”
(Editing by Stephen Nisbet)

UPDATE 3-Euro zone must avoid piecemeal solution -IMF chief