IMF chief urges big economies to pursue growth agenda
IMF managing director Christine Lagarde said the euro zone debt crisis and US “fiscal cliff” could have brought growth screeching to a halt, an outcome only avoided by decisions often taken at the last minute. In particular, she urged the US to raise its borrowing limit and pressed Europe to follow through with commitments to tackle its debt crisis, which in some countries means more fiscal consolidation. “Clearly, the collapse has been avoided in many corners of the world,” Lagarde told reporters even as she expressed concern policymaker resolve could weaken just because there is a “bit” of recovery in sight and financial stresses have eased.
“It’s important to follow through on policies to put uncertainty to rest,” she said. “There is still a lot of work to be done.”
In her first news conference of 2013, Lagarde focused on political battles over the budget in the US and the risks the euro zone’s debt crisis still presents. That focus is not new but Lagarde made clear she worried that complacency could set in.
In an interview with Reuters Insider television, Lagarde warned that a fight in the US over raising the nation's $16.4 trillion borrowing limit could be “catastrophic” for the global economy if it
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