Lagarde on Euro Zone: No Way Out and No Bailout
Euro zone member states must meet their commitments on budget stability and cannot be bailed out by the euro zone, French Finance Minister Christine Lagarde told CNBC in Davos on Friday.
Asked if she was worried that the Greek crisis could have ripple effects on the rest of the euro zone, Lagarde said: "The euro zone is the euro zone so it's one single monetary area."
"Any single member state, France, Germany, Greece, is not alone. We're jointly accountable to each other," she said. "(The euro zone) is a monetary zone which holds us together. There's no way out. There's no bailout system and we have to deliver on the commitments that we made."
Lagarde also called for European Union states to rein in spending in order for the economy's recovery to remain sustainable and bring them back to the Maastricht-agreed limit of 3 percent of gross domestic product.
"We broke the limit (on budget gap ceilings) and now we have to get back gradually where we should be," she said.
French and German governments Thursday denied a report in French daily Le Monde that euro zone states were considering coming to Greece's aide to prevent a budgetary disaster.
The report said the countries were considering bilateral aid schemes for the country.
Boosting employment is an important way to ensure the economic rebound is sustainable, Lagarde said, adding: "We don't believe that growth without jobs will be satisfactory."