IMF says public debt in developed countries at ‘wartime levels’

 

Christine Lagarde, managing director of the International Monetary Fund

Source: Press TV

http://www.presstv.ir/detail/2012/10/12/266215/public-debt-at-wartime-levels-imf-warns/

The International Monetary Fund (IMF) has warned that the public debt in developed countries stands at “wartime levels” and poses a major threat to the global economy.

“Without growth, the future of the global economy is in jeopardy, and perhaps the greatest roadblock will be the huge legacy of public debt, which now averages 110 percent in advanced economies, pretty much wartime levels,” said IMF Managing Director Christine Lagarde at the annual meetings of the International Monetary Fund and the World Bank in Tokyo on Friday.

“And this leaves governments highly exposed to subtle shifts in confidence,” she added.

“We have seen it. We are seeing it in the eurozone for instance. It also ties the governments’ hands, especially as they seek to build the infrastructure of the 21st century while keeping the policies, particularly the social promises of the 20th century.”

Lagarde further highlighted that decreasing public debt loads is of utmost importance, while noting it was “incredibly difficult without growth.”

On October 9, the IMF reported that the global economy could get worse due to the eurozone crisis and the US fiscal cliff in the future.

The report read, “A key issue is whether the global economy is just hitting another bout of turbulence in what was always expected to be a slow and bumpy recovery or whether the current slowdown has a more lasting component… The answer depends on whether European and US policymakers deal proactively with their major short-term economic challenges.”

The international organization also warned on October 10 that the global financial confidence is “very fragile,” calling on European policymakers to strengthen the financial ties within the euro area.

Europe plunged into financial crisis in early 2008. Insolvency now threatens heavily debt-ridden countries such as Greece, Spain, Portugal, Italy, and Ireland.

European leaders must act quickly to solve euro crisis: Lagarde

International Monetary Fund chief Christine Lagarde

Source: Press TV
http://www.presstv.ir/detail/2012/06/09/245320/imf-urges-eu-leaders-to-solve-crisis/

International Monetary Fund (IMF) chief Christine Lagarde has called on European leaders to take immediate action to solve the eurozone’s crisis.

"We are still at a great distance from our final destination," the IMF leader said, adding that five years into the crisis, Europe stands at “a crossroads”.

Lagarde’s remarks were in response to German Chancellor Angela Merkel’s proposal of long-term plans while other EU leaders suggest quick solutions to the crisis.

"Policymakers need to lay out and follow a clear roadmap of how to finish the job -- not just looking to the next five or ten years, but looking to the next weeks and months ahead," Lagarde added.

Meanwhile, Moody’s rating agency has warned of further downgrades on top-rated EU nations, including Germany, in case of Greece’s exit from the bloc.

There are worries that more delays in resolving the eurozone debt crisis, which began in Greece in late 2009 and infected Italy, Spain and France last year, could push not only Europe but also much of the rest of the developed world back into recession.

Lagarde named first female IMF chief

Lagarde is widely respected for her leadership during Europe's financial crisis during the past three years

Source: Press TV
http://www.presstv.ir/detail/186676.html

France's Christine Lagarde has been named the first ever female chief of the International Monetary Fund (IMF), replacing scandal-hit Dominique Strauss-Kahn.

"The executive board of the International Monetary Fund today selected Christine Lagarde to serve as IMF managing director and madam chairman of the executive board for a five-year term starting on July 5, 2011," the IMF said in a statement.

The French finance minister replaces Strauss-Kahn, who resigned on May 18 over charges of sexually assaulting a hotel maid in New York.

Lagarde is widely respected for her leadership during Europe's financial crisis during the past three years.

Lagarde “is the first woman named to the top IMF post since the institution's inception in 1944,” the statement added.

IMF should reflect "changing world": Lagarde

Source: CCTV
http://english.cntv.cn/20110624/108196.shtml


WASHINGTON, June 23 (Xinhua) -- The International Monetary Fund (IMF) needs to continue to improve its legitimacy and effectiveness and reflect the changing world, said Christine Lagarde, front-runner for the IMF top position on Thursday.

"I firmly believe that the legitimacy and effectiveness of the Fund cannot be taken for granted; they must be continuously proved, and improved, whenever possible or necessary," said Lagarde in a statement to the IMF Executive Board.

"Should you entrust me with the challenging task of Managing Director, I would strive, over the next five years, to build a Fund that would be adapted to a changing world," the French finance minister said.

She noted that the IMF has learnt a great deal from the recent financial crisis and definitely changed for the better, successfully repositioning itself at the center of the global economic and financial system.

However, the 187-member international financial institution needs to continue its shift towards responsive, even-handed and balanced actions in support of global economic and financial stability and to better serve the whole membership, she said.

From 2008 to 2010, the IMF was committed to shifting quotas from advanced economies to dynamic emerging markets and developing countries. But part of the commitment has not yet materialized, she added.

Lagarde, former head of an international law firm, emphasized some key principles that the IMF needs to focus over the next five years, including increasing its relevance, responsiveness and legitimacy.

"Legitimacy is a precondition to the acceptance of any reform. One obvious prerequisite is to implement promptly the historic governance reform that was agreed last year. France has shown leadership in this respect. More broadly, if elected, I would be committed to continuously adapting the representation of the Fund, in particular quotas, to changing economic realities," she said.

She also noted that the IMF needs to develop sufficient resources and adequate tools to support member countries. It also needs to create a more diversified environment, she said

The IMF began interviews Monday with candidates running for its managing director.

Agustin Carstens, Mexico's central bank governor who is also contesting the IMF's top job, met the IMF board earlier this week.

Carstens also stressed the need to deepen the IMF's governance reform to improve its legitimacy and effectiveness.

The IMF started the process to select its new chief in late May to succeed former Managing Director Dominique Strauss-Kahn, who resigned on May 18 to face sexual assault charges in New York.

Carstens and Lagarde made the IMF's shortlist of candidates on June 13.

The IMF board is scheduled to meet on early next week to discuss the strengths of each candidate, with the aim to complete the selection process by June 30, said the IMF on Thursday.

"Although the Board may select a Managing Director by a majority of the votes cast, the Board's objective is to select the Managing Director by consensus in a formal meeting," the IMF board said in a statement.

Lagarde also met U.S. Treasury Secretary Tim Geithner on Thursday.

"The Secretary believes that Minister Lagarde's strong leadership skills and experience makes her an exceptionally talented candidate for IMF managing director," said the U.S. Treasury Department in a statement.

The department noted that the U.S. has not yet endorsed a candidate.