IMF must press eurozone to launch bold changes
Source: Agencies |
April 23, 2012, Monday
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Print Edition
Print Edition
THE International Monetary Fund, armed with a replenished arsenal containing billions of dollars to battle Europe's lingering debt crisis, now must press governments in the eurozone to carry out bold changes to reassure nervous financial markets and avert sending the crisis into a more dangerous phase.
The IMF's final communique on Saturday after hours of high-level meetings did not go beyond saying what structural reforms were needed to restore fiscal health and spur economic growth in the 17 countries that use the euro.
The major accomplishment of the weekend meeting was the pledge of at least US$430 billion from individual countries that will nearly double IMF's reserves available for loans to almost US$1 trillion.
"It is nice to have a big umbrella or a big firewall" IMF Managing Director Christine Lagarde said at a news conference wrapping up the talks.
But US Treasury Secretary Timothy Geithner told the IMF policy-setting panel that Europe needs to be more creative and aggressive in fighting its debt crisis, employing all the financial resources at its disposal, including the European Central Bank.
"The success of the next phase of the crisis response will hinge on Europe's willingness and ability ... to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of the markets," Geithner said.
German Finance Minister Wolfgang Schaeuble said the countries experiencing financial crisis in Europe are undertaking far-reaching reform measures.
"This includes labor markets, social security systems, public administrations and financial market institutions," he said. "This will allow countries to regain competitiveness and strong growth. It is the only way we will be able to restore confidence of our citizens and investors."
The IMF's final communique on Saturday after hours of high-level meetings did not go beyond saying what structural reforms were needed to restore fiscal health and spur economic growth in the 17 countries that use the euro.
The major accomplishment of the weekend meeting was the pledge of at least US$430 billion from individual countries that will nearly double IMF's reserves available for loans to almost US$1 trillion.
"It is nice to have a big umbrella or a big firewall" IMF Managing Director Christine Lagarde said at a news conference wrapping up the talks.
But US Treasury Secretary Timothy Geithner told the IMF policy-setting panel that Europe needs to be more creative and aggressive in fighting its debt crisis, employing all the financial resources at its disposal, including the European Central Bank.
"The success of the next phase of the crisis response will hinge on Europe's willingness and ability ... to apply its tools and processes creatively, flexibly and aggressively to support countries as they implement reforms and stay ahead of the markets," Geithner said.
German Finance Minister Wolfgang Schaeuble said the countries experiencing financial crisis in Europe are undertaking far-reaching reform measures.
"This includes labor markets, social security systems, public administrations and financial market institutions," he said. "This will allow countries to regain competitiveness and strong growth. It is the only way we will be able to restore confidence of our citizens and investors."
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