IMF chief warns of Greek euro exit 'contamination'

(LONDON) - IMF chief Christine Lagarde warned on Wednesday of the risk of "contamination" if Greece quits the euro and said the eurozone might therefore see the value of paying more to keep Greece in.

The International Monetary Fund managing director told BBC radio in an interview that a Greek exit from the single currency was "certainly not the most favourable option and not one that we encourage".

The trouble with a Greek departure is "the risk of contamination, from one isolated member that would be carved out, to other members within the zone that want to stay within the zone, who are wanted by their partners and who are doing all the right things," the former French finance minister said.

Asked what would happen if Greek voters rejected austerity in their second general election in the space of weeks on June 17, she said: "If the Greek people don't want to pay the price, somebody has to pay the price."

Lagarde said other eurozone countries might see the integrity of the 17-country bloc as worthwhile enough to keep supporting Greece with more money.

"It may well be that members of the eurozone will be prepared to support financially more and maybe longer the Greek country and population to stay within the zone," she said.

She said Greece had made "huge efforts but they have more to do" to sort their finances out.

Lagarde said there was an "inconsistency" in Greek voters rejecting political parties that supported "belonging to the eurozone and being sensible about it" and saying they want to remain in the euro, as doing so "has a price".