IMF: "Risk of euro crisis 'removed' for now"

The risk of crisis in the eurozone has been "removed" for now, IMF head Christine Lagarde said, as Greece rescue efforts showed signs of progress. "As we speak, it looks like it's going through," Lagarde, head of the International Monetary Fund, said in an interview with broadcaster Charlie Rose on the US public broadcaster PBS, on Thursday. In Athens it appeared stricken Greece had clinched a high-stakes debt swap as a deadline for bondholders to accept huge losses on their Greek holdings passed, opening the way for an urgent bailout. "It looks as if the numbers will be promising," Lagarde said late Thursday, adding that the "real risk of a crisis, of an acute crisis, has been, for the moment, removed." Lagarde said she was "not pessimistic" about the plan's chance for success, adding: "Spring is in the air." With a threshold apparently met, Greece was expected to press on towards unlocking a 130-billion-euro bailout from the European Union and IMF, a process that might include resorting to so-called collective action clauses Athens introduced to force holdouts to accept the deal. Lagarde meanwhile noted increasing calls for a firewall fund to keep the eurozone protected from future crises: "They need high volumes. And the bigger the better, because it will not be used," she said. "I think it's in the interests of the Europeans to have that firewall in order to stop the contagion and be able to throw a lot of money at the markets if the markets and the investors decided to suddenly not really be interested in Italian debt, for instance," she said. The Greek bond swap is intended to avert default by Greece when debt falls due on March 20 and is a key part of a eurozone-IMF rescue, worth up to 237 billion euros and aimed at enabling the country to rebuild its economy.