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IMF's Lagarde calls for Japan, US debt cut targets

Published January 27, 2012 Updated January 27, 2012 06:00pm

"Everybody needs to do something, it needs to be collective," the International Monetary Fund chief told the World Economic Forum.

While eurozone states have to make a special effort as Europe is the epicentre of the current crisis, the United States and Japan "have to do something as well."

"They have to really demonstrate that they have a medium-term objective which is to reduce their debt, to reduce their deficit and to run their public affairs on a much more balanced and sustainable basis," she said.

US government debt now stands at just over $15 trillion but is expected to rise to over $16 trillion by year-end. Japan's total public debt is estimated at 1,024 trillion yen ($13 trillion)

Beyond the industrialised world, Lagarde also urged emerging giants to pitch in to combat the crisis by stimulating domestic demand.

"China and any country that has a surplus must help its domestic market consume a bit more, a bit better and not to rely too extensively on exports," she said, echoing EU and US calls for more Chinese spending.

Copyright AFP (Agence France-Presse), 2012