Greece Needs to Accept Bailout Terms: South Korea

South Korea’s President Lee Myung-bak says Greece needs to accept the terms of a $130 billion international bailout agreed in March and there will be no disbursement of money from the International Monetary Fund (IMF), unless the country does so.

South Korean President Lee Myung-bak
South Korean President Lee Myung-bak

“I urge the Greek government, the corporations, the workers and the people, (they) need to accept those terms,” Lee said in an interview with CNBC’s Chloe Cho in Seoul.

“I think the terms that Greece is facing now by the IMF is very reasonable considering what Korea had to go through,” Lee said, referring to the IMF bailout that South Korea received in 1997 during the Asian financial crisis.

Global markets have been hit by increased volatility in recent weeks after Greece’s pro-bailout parties were routed in elections held on May 6th. The inconclusive polls left a fractured parliament. With no party able to form a coalition government, the country is headed for new polls on June 17th.

South Korea has been especially affected by fears that Greece will exit the euro zone, with the benchmark Kospi index falling nearly 9 percent in the last two weeks as foreign investors pulled money from the stock market on growing risk aversion. Korea’s export-dependent economy is also seen as vulnerable to further turmoil in Europe and the won last week fell to a five-month low against the U.S. dollar.

President Lee said Greece should not be left as it is and urged Germany and France to hold talks on the situation.