Asked if the plan devised by Greece’s eurozone creditors could succeed without debt relief, Lagarde said: “Categorically, no”.

“Now we did say that along to the Europeans but clearly the necessary deterioration which has taken place in the last couple weeks as a result of the bank closure and the capital control put in place by the Greek authorities has made the whole situation a lot more serious”.

On the same radio station, French Finance Minister Michel Sapin said he is in favor of a Greek debt restructuring but opposed to any direct haircut, which would be against French taxpayers’ interest.

“The alternative to this agreement would not be a “time-out” from the euro… but rather predictable chaos”, German Chancellor Angela Merkel said, during her speech in parliament on Friday, referring to the tentative plan that was discussed during the protracted negotiations between Greece and its creditors in Brussels early Monday.

“This complete package has two legs, a Greek leg that entails an in-depth reform of the Greek economy. That means holding a budgetary position that is sound and gives the country solidity; and the second leg is that of the lenders, which entails supplying finacing and restructuring the debt to ease its burden”, she said.

Lagarde said the bailout had to be agreed on a very tight schedule: “It is not going to be a path of roses, it will be complicated, it will be laborious”.

Under the new bailout terms, eurozone governments will contribute between 40 billion and 50 billion euros, the International Monetary Fund is expected to contribute another major chunk, and the rest will come from selling off state assets and the financial markets. He added that Finland would not be giving any new money to Greece, because it has already made its contributions to the eurozone bailout fund, the European Stability Mechanism.

“It will not be a road paved with roses”.