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IMF urges Italy to act quickly
Source: Agencies |
November 11, 2011, Friday
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Print Edition
Print Edition
THE head of the International Monetary Fund yesterday urged Italy to act quickly to fill its damaging political vacuum, and China said it was willing to help maintain global financial stability that was being threatened by the eurozone crisis.
IMF Managing Director Christine Lagarde spoke during a visit to China as Rome politicians scrambled to find a replacement for Silvio Berlusconi, who has said he will step down as prime minister when parliament approves reforms aimed at placating markets.
"No one exactly understands who is going to come out as the leader. That confusion is particularly conducive to volatility," Lagarde told a news conference in Beijing.
"So from my perspective, political clarity is conducive to more stability and my objective from the Fund's point of view is better and more stability."
On European markets yesterday, hopes that new government being formed in Italy and Greece could help stave off a eurozone break-up drove the euro higher and top-rated government debt lower, while stocks held above a three-week trough.
China - which holds an estimated 25 percent of its US$3.2 trillion of foreign exchange wealth in euro-denominated assets - is equally keen to see clarity and stability take hold in the eurozone, the country's single biggest export market.
Premier Wen Jiabao told Lagarde that Europe's sovereign debt crisis was a serious challenge to the world's economic recovery, and had increased financial risks for developed economies, Xinhua news agency reported.
"China supports the measures taken by the European Union, European Central Bank and IMF to deal with the crisis, and is willing to work with all parties to discuss effective cooperative measures to maintain global financial stability," Wen said.
China remains focused on maintaining its own relatively fast, stable growth, Wen added.
Italian 10-year bond yields eased yesterday from the previous day's record highs, but they continued to trade around 7 percent, a level many economists consider unsustainable for financing sovereign debt of more than 2 trillion euros.
Lagarde, a former French finance minister, declined to comment on a Reuters report that German and French officials have discussed plans for a radical overhaul of the EU to create a more integrated and potentially smaller eurozone.
She also said she believed Chinese authorities were prepared to let the yuan appreciate further.
IMF Managing Director Christine Lagarde spoke during a visit to China as Rome politicians scrambled to find a replacement for Silvio Berlusconi, who has said he will step down as prime minister when parliament approves reforms aimed at placating markets.
"No one exactly understands who is going to come out as the leader. That confusion is particularly conducive to volatility," Lagarde told a news conference in Beijing.
"So from my perspective, political clarity is conducive to more stability and my objective from the Fund's point of view is better and more stability."
On European markets yesterday, hopes that new government being formed in Italy and Greece could help stave off a eurozone break-up drove the euro higher and top-rated government debt lower, while stocks held above a three-week trough.
China - which holds an estimated 25 percent of its US$3.2 trillion of foreign exchange wealth in euro-denominated assets - is equally keen to see clarity and stability take hold in the eurozone, the country's single biggest export market.
Premier Wen Jiabao told Lagarde that Europe's sovereign debt crisis was a serious challenge to the world's economic recovery, and had increased financial risks for developed economies, Xinhua news agency reported.
"China supports the measures taken by the European Union, European Central Bank and IMF to deal with the crisis, and is willing to work with all parties to discuss effective cooperative measures to maintain global financial stability," Wen said.
China remains focused on maintaining its own relatively fast, stable growth, Wen added.
Italian 10-year bond yields eased yesterday from the previous day's record highs, but they continued to trade around 7 percent, a level many economists consider unsustainable for financing sovereign debt of more than 2 trillion euros.
Lagarde, a former French finance minister, declined to comment on a Reuters report that German and French officials have discussed plans for a radical overhaul of the EU to create a more integrated and potentially smaller eurozone.
She also said she believed Chinese authorities were prepared to let the yuan appreciate further.
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