IMF director says global recovery very fragile

Apr 3, 2012, 3:26 PM

Associated Press

WASHINGTON (AP) – The managing director of the International Monetary Fund said Tuesday that the global economy is making some advances in digging itself out of a punishing recession, but that the recovery remains very fragile, especially in Europe. She suggested cutting government spending too quickly in developed countries like the United States and larger European nations could make things worse, not better.

Policy-makers on both sides of the Atlantic need “breathing space to finish the job,” Christine Lagarde said in prepared remarks to the Associated Press Annual Meeting Europe’s faltering would put the U.S. economy and American jobs at risk. “America has a large stake” in how Europe and the rest of the world fares, she says.

She said it is important to continue and expand emergency programs among the 17 countries that use the euro to help heavily indebted countries there.

“We should not delude ourselves into a false sense of security,” she said. “The recovery is still very fragile. The financial system in Europe is still under heavy strain. Debt is still too high, public and private. Stubbornly high unemployment is straining the seams of society. Rising oil prices have the potential to do a lot of damage.”

Her remarks came after the Eurozone countries on Friday boosted their emergency bailout funds for heavily indebted by $1.1 trillion (800 euros). That was short of what Lagarde and other international leaders have said is needed to calm financial markets.

She suggested that bold steps are needed such as those taken by the U.S. Federal Reserve and the European Central Bank to help “keep growth strong and steady.”

She said, most countries are running deficits that are too high and “need to bring down debt over time. And, yes, some countries under pressure have no choice but to cut deficits today. But a global undifferentiated rush to austerity will prove self-defeating. Countries like the united States with low costs of borrowing should not move too quickly.”

Those remarks thrust her into the U.S. presidential debate, where Republicans are united in calling for deep cuts in federal spending, while President Barack Obama _ who was to address the Associated Press meeting later Tuesday _ and congressional Democrats are calling for more job-creating spending, along with raising taxes on the wealthy to help trim budget deficits now exceeding $1 trillion a year.

Lagarde, noting that over 200 million people globally, including nearly 13 million in the U.S., are without work, declared, “jobs must be a priority.”

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Uncategorized

...
Promotions

Dead & Company – The Final Tour

Dead & Company - The Final Tour will be at Talking Stick Resort Amphitheatre on May 23. Register now for your chance to win tickets!!
30 days ago
Danny Shapiro

Who is running in 2022 related links

Testing. Follow @DannyShapiro13
2 months ago
Tyler Bassett

2022 Post-Election relateds

Follow @Tyler_Bassett
3 months ago
Kevin Stone

2022 general election relateds

Testing. Follow @kstonezone
3 months ago
Stephanie Terrell, a Portland, Ore., renter who owns a used electric car, charges it at a public ch...
Associated Press

Correction: Electric Vehicles-Urban Living story

PORTLAND, Ore. (AP) — In a story published October 25, 2022, about electric vehicle chargers, The Associated Press erroneously reported the number of commercial chargers — ones not in private homes — that are publicly accessible in Los Angeles. There are 4,367, not about 3,000. Copyright © The Associated Press. All rights reserved. This material […]
3 months ago

Sponsored Articles

...
Fiesta Bowl Foundation

Celebrate 50 years of Vrbo Fiesta Bowl Parade magic!

Since its first production in the early 1970s, the Vrbo Fiesta Bowl Parade presented by Lerner & Rowe has been a staple of Valley traditions, bringing family fun and excitement to downtown Phoenix.
(Photo via MLB's Arizona Fall League / Twitter)...
Arizona Fall League

Top prospects to watch at this year’s Arizona Fall League

One of the most exciting elements of the MLB offseason is the Arizona Fall League, which began its 30th season Monday.
...
Quantum Fiber

Stream 4K and more with powerful, high-speed fiber internet

Picking which streaming services to subscribe to are difficult choices, and there is no room for internet that cannot handle increased demands.
IMF director says global recovery very fragile