IMF tells Europe to take action now
WASHINGTON: The International Monetary Fund told Europe to take action now to contain the eurozone crisis and prevent a meltdown in the weakest economies from damaging the entire region and the global economy.
The Fund warned that the results of any policy paths would be unpredictable, and also said the eurozone needed more private money involved to support its most fragile members and its still-frail banks.
"We should not delay any longer clarifying some of the uncertainties that are hanging over the solutions of the sovereign crisis in the periphery," said Luc Everaert of the IMF's European Department, detailing a new report on the economic situation of the 17-country euro area.
"The crisis in the periphery is not fully addressed yet. Directors think this should be done very urgently," he said.
The Fund urged Europe's leaders to expand the size and operational scope of the European Financial Stability Facility to intervene more effectively, suggesting this would go a long way to helping stabilize the region.
A parallel, detailed report on "spillover" risks warned that even Europe's strong economies, like Germany and France, were at danger from contagion from a meltdown in the struggling countries of Greece, Ireland, Portugal, Italy and Spain.
"Spillovers could be large if stress in euro-area crisis countries spreads to other members. Delays in resolving the crisis could be costly for the euro area and the global economy," the IMF said.
The IMF released its report two days before European Union leaders are slated to meet in Brussels for a summit on a second rescue of financially hobbled Greece, with agreement on a path forward still uncertain.
Copyright AFP (Agence France-Presse), 2011
Copyright APP (Associated Press of Pakistan), 2011
Comments
Comments are closed for this article.