World Finance Chiefs Meet In Germany On Global Economy

Posted October 30th, 2012 at 9:00 pm (UTC-5)
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German Chancellor Angela Merkel hosted the heads of global financial bodies Tuesday in Berlin to discuss ways of reviving the western world's stagnating economy.

The chief of the International Monetary Fund, Christine Lagarde described the economic growth in recent years as “tepid” and recovery from the financial crisis as “laborious.” She urged the world's major economies to continue with consolidation.

“What is needed is concerted action and a partnership, really, between monetary authorities who need to continue to conduct sensible monetary transmissions of their policies, through accommodative policy if necessary; partnership with the governments who have to continue their fiscal consolidation at a sensible pace, which is not one-size-fits-all, but needs to address the debt for the long term; and the structural reforms that are needed in order to improve the competitiveness of the advance economies.”

Chancellor Merkel said that the economic outlook is not “as good as we would hope.” She said the European debt problem was discussed in general terms, without focusing on Greece.

Representatives of the World Trade Organization, the World Bank and OECD also attended the meeting.

In Athens, Greek Prime Minister Antonis Samaras said earlier Tuesday that he has reached agreement with international lenders on a new austerity plan, which includes $17 billion in spending cuts and reforms in Greece.

He said if approved by parliament, the agreement would secure another $40 billion segment in bailout funds for the indebted country.

But Merkel said the European Union is awaiting a report on Greece's reform progress by the representatives of the European Commission, the European Central Bank and the International Monetary Fund before another loan segment can be approved.

It is not sure that Greece's parliament will approve the unpopular austerity measures.

Socialist leader Evangelos Venizelos called Mr. Samaras's announcement of a deal with Greece's creditors “unfortunate, to say the least.” The Democratic Left party says it opposes labor reforms sought by the lenders.

In Lisbon, Portugal's Prime Minister Pedro Passos Coelho said that austerity measures imposed by the IMF and the European Union in exchange for a bailout loan will not reduce his country's debt without a structural reform of the state.

Although he did not elaborate, the opposition Socialists rejected his proposal and called it an admission of the failure of his policies.