WASHINGTON - International Monetary Fund chief Christine Lagarde warned on Thursday that more efforts were needed to get the global economy back on track.
“We stopped the collapse, we should avoid the relapse, and it’s not the time to relax,” Lagarde said at a news conference at the multilateral institution’s Washington headquarters.
“There’s still a lot of work to be done,” said Lagarde.
The IMF managing director (MD) pointed to signs of economic improvement but also noted deterioration on the jobs front which she called critical from not only from an economic point of view but also from a social point of view. “We need growth for jobs and jobs for growth,” she said.
The eurozone, the center of the public debt crisis dragging down global growth, and where the IMF together with the European Union (EU) has rescued Greece, Ireland and Portugal, has to do more to address its challenges, she said.
Financial firewalls erected by the EU and the European Central Bank, such as the European Stability Mechanism rescue fund and ECB bond purchases, “have not proven operational.”
“Progress needs to be made on the banking union,” she added.
Lagarde suggested that further monetary easing in Europe may be appropriate to sustain demand.
As for the United States, the IMF chief called on bitterly divided politicians to reach a compromise on the nation’s borrowing limit and deficit-reduction plans.
“All sides should pool together in the national interest” to avoid another “avoidable political mistake,” she said.