IMF Chief Lays Out Agenda for Global Recovery

Posted April 4th, 2012 at 4:30 am (UTC-5)
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The head of the International Monetary Fund is warning world leaders against a false sense of security as the global economy recovers from its hardest winter in a generation.

Speaking in Washington Tuesday, IMF Managing Director Christine Lagarde said she sees welcomes signs of a thaw in the world economy compared to a few months ago, including signs of stabilization in Europe and of stronger growth in the United States.

But, she warned in a speech to the annual meeting of the Associated Press, leaders should not delude themselves that the crisis has passed.

“The recovery is still very fragile. The financial system in Europe is still under heavy strain. Debt is still too high, both public and private. Stubbornly high unemployment is really straining the seams of society. And to add to the list as if it wasn't enough, oil prices are clearly another cloud on the horizon.”

Lagarde said three main things must be done to keep the world economy on course, beginning with actions to maintain stability and ensure financial calm. She cited European efforts to strengthen their economic firewall as an example.

Secondly, she said, governments must encourage growth, using monetary and fiscal policies to support economic activity wherever possible. She warned that an “undifferentiated rush to austerity” will be self-defeating.

Finally, she said, governments must work to create jobs.

“Because at the moment, as you know, there are over 200 million people who are in search of a job, of which 13 million are in this country alone. And to have seen those young job seekers in pretty much every country,whether in Europe, here or in the Arab Spring countries — Arab Renaissance. Well there is not much renaissance for those who are without a job, who had the training and whose training is totally ill adjusted for the job needs of their respective market. It is particularly needed in those countries where there is hope and nothing to match it.”

Lagarde also noted that the world is becoming more interconnected by the day, meaning that economic disruption in any one country can affect people all around the world.