IMF urges eurozone to make bold reforms

 
Sign for IMF World Bank Spring Meetings The IMF says bold reforms are needed to boost confidence and growth

The International Monetary Fund (IMF) has told the eurozone it must make bold reforms to reassure financial markets.

A statement from its governing council, says the 17-strong eurozone needs to make major structural reforms to boost confidence and growth.

On Friday, the annual meeting of the global body gained commitments from a range of countries to increase its lending firepower to $430bn (£247bn).

IMF head Christine Lagarde said the money was not just for the eurozone.

The IMF statement said: "In the euro area continued progress on ensuring debt sustainability, securing financial stability and undertaking bold structural reforms will be crucial to boosting confidence and productivity."

It said that the global economy was recovering gradually but that "risks were high" and interest rates needed to remain low.

The US did not provide any extra loans.

Its treasury secretary, Timothy Geithner, said Europe needed to use imagination and force to fight the continuing debt crisis.

"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," he said.

What is the International Monetary Fund?

German finance minister Wolfgang Schaeuble said the region was working hard to make changes.

"This includes labour markets, social security systems, public administrations and financial market institutions," he said.

The new money for the IMF's loan fund almost doubles the amount of money available to $1 trillion.

Some emerging economies expressed concerns that this should not just be used to help Europe.

The IMF's managing director, Christine Lagarde, welcomed the boost to funds but denied it was earmarked for the eurozone, where the crisis has led to bailouts for Greece, Ireland and Portugal. Some investors fear the crisis could eventually include the much bigger economies of Spain and Italy.

Mrs Lagarde said: "It is nice to have a big umbrella, or a big firewall... and that was really the achievement."

She said the talks had made clear that: "Number one, those bilateral loans... do not form a special pot of funds or coffers that have an EU label on it. It is for all members of the IMF."

 

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  • rate this
    +23

    Comment number 170.

    I didn't vote for the IMF party, come to think of it, I'm not sure that I saw them on the ballot paper either. Nor did I see references to the IMF in party manifestos. If the IMF want to dictate domestic economic policy to European countries then perhaps it should form a political party and compete for its power like the democratically elected governments that they seek to control.

  • rate this
    +2

    Comment number 93.

    The IMF appear determined to pile on the misery while countries are trying very hard to get used to the last lot of changes. Keep the strong strong and punish the weak. Each country should have the chance to get their own econimies working without intereference from the IMF.

  • rate this
    +7

    Comment number 52.

    If you look at the changes they claim they're making they are not changes, its more of the same, severe austerity but nothing to change the fundamental problems with the currency. They refuse to their tools creatively & flexibly or to support the economies of their member States

  • rate this
    -3

    Comment number 35.

    Bold reforms are advocated for the Euro: how about each country having its own version of it, ie The German euro ,the French euro , the Italian euro,etc, these could all then have their own rates of exchange and their values could go up or down independent from each other and each could then have their own design of notes and coins to identify with its country, and then they would all be happy.

  • rate this
    +4

    Comment number 3.

    Can't help but comment on the lack of direction offered by the IMF. It is all very well saying you must make structural reforms but is this code for something. Could it mean you need every body to have less money. It sounds like the IMF might really mean that until everybody has got used to being poorer and accepted austerity is here to stay then the Eurozone will remain in crisis.

 
 

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