IMF boss signposts recovery
The Age
Thursday February 3, 2011
THE head of the International Monetary Fund has warned politicians that while the recovery is under way, "it is not the recovery we wanted".IMF managing director Dominique Strauss-Kahn said the recovery was "beset by tensions and strains which could even sow the seeds of the next crisis".Speaking in Singapore, he argued that allowing emerging markets to grab the lion's share of global growth at a time when developed nations are weighed down by debts would create unsustainable imbalances.Mr Strauss-Kahn, a former French finance minister, said: "Without jobs and income security, there can be no rebound in domestic demand and ultimately, no sustainable recovery."IMF officials are in Greece this week to broker a deal with the government after figures showed it was struggling to make cuts in line with an IMF and European Union bailout.The IMF has been criticised for forcing nations in need of bailout funds to sack public sector workers and impose stiff austerity measures.In a pointed message to countries such as Britain, Mr Strauss-Kahn said it was up to individual states to limit budget deficits without raising income inequalities or hindering growth."In the advanced economies, the key is to promote growth and job creation. While structural reforms are essential to make these economies more competitive, these reforms are only likely to pay off over time. So what can be done to improve the short term? The most urgent task is to repair and reform the financial sector, to reduce risk and pave the way for healthy credit growth." GUARDIAN
© 2011 The Age
