Lagarde sees move on IMF loan after Greece vote

IMF chief Christine Lagarde welcomed Greek Prime Minister George Papandreou's commitment to hold his euro referendum soon and pledged to move on the next stage of the Fund's loan for Greece after the vote. "I welcome the Prime Minister's indication that the referendum which has been announced will take place as soon as possible so that the Euro Summit agreement can be implemented expeditiously," Lagarde said in a statement in Cannes, France ahead of the G20 summit there. "As soon as the referendum is completed, and all uncertainty removed, I will make a recommendation to the IMF Executive Board regarding the sixth tranche of our loan to support Greece's economic program," she added in the statement released in Washington, the Fund headquarters. Lagarde stressed that she was "convinced that the agreement reached by the leaders of the Euro Area at their Summit last week, which includes a substantive reduction in Greece's debt burden and additional financial support for a new ambitious program, will greatly benefit Greece by helping to restore growth and create jobs. " President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany meanwhile warned that Greece must decide if it wants to abide by the terms of a bail-out deal and to stay in the euro. Sarkozy warned that not a further cent in rescue loans would be transferred until Greeks made a clear response, with Athens set to run out of funds and default in weeks unless it receives eight billion euros. "We hope to pursue Europe with our Greek friends," Sarkozy told a press conference following crisis talks with Papandreou, Merkel and EU and IMF officials. On Monday, Papandreou shocked Europe by saying he would put the terms of a bail-out deal agreed last week with European leaders to a referendum, sending panic through markets, which thought the rescue plan a done deal. Papandreou has said that a referendum could be held as early as December 4, and acknowledged that Greece's future in the euro was at stake.