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Summary IMF head Thursday called for urgent action to tackle Europe's debt problems.
IMF chief Christine Lagarde, speaking to reporters as the IMF and World Bank held annual meetings in Tokyo, praised recent steps taken by the European Central Bank and European governments, but said more needs to happen, and faster.Finance ministers and central bankers from the Group of Seven richest nations met for about 90 minutes on the sidelines to discuss the European debt crisis.They also discussed the impending budget impasse in the U.S., an issue that prompted some at the meeting to express concern, according to a senior Japanese Ministry of Finance official who briefed reporters on condition of anonymity, which is ministry policy. They released no communique.U.S. Treasury Secretary Timothy Geithner was upbeat about recent moves in Europe to stabilize and reform crisis-stricken economies.The IMF has urged the U.S. to raise the ceiling on the level of debt the government can issue, which is capped by law. In August 2011, a battle between Republicans and Democrats over raising the limit wasnt resolved until the U.S. almost defaulted on its debt.Lagarde called for decisive action on the issue.The IMF has scaled back its global growth forecast for 2012 to 3.3 percent from 3.5 percent, and has warned that even its dimmer outlook might prove too optimistic if Europe and the United States fail to resolve their crises.She did praise recent steps to shore up Europes financial system, which has been burdened by high government debt and weak banks in countries such as Greece and Spain, but stressed that more needs to be done.Greece, Ireland and Portugal have already received bailouts from the IMF, European Central Bank and European Union. Spain has worried investors by declining so far to ask for financial aid from the 17 country grouping that uses the euro currency.Action has already occurred, Lagarde said. But more needs to happen and faster.Speaking just weeks before the U.S. presidential election, Geithner emphasized the progress made in countering the global financial crisis and reviving growth.From my perspective, the U.S. economy is doing significantly better than we had any reason to expect, he said.Lagarde also said two senior Chinese finance officials who cancelled their trip to Tokyo amid a territorial dispute with host Japan will lose out by not attending. Our concern is that they will be missing a great meeting, she said. We have a lot of substantive issues to discuss.
