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| IMF chief Christine Lagarde addressing a press conference on the economic policies in the years ahead [PHOTO: UNifeed] |
Washington: International Monetary Fund Managing Director Christine
Lagarde has said that although the policymakers stopped a collapse of the
global economy in 2012, policy makers need avoid a relapse of uncertainty, and
cannot afford to relax in the New Year.
She named high levels of unemployment and still-pending
reform of financial sector regulation as warning signs that global policymakers
need to press on.
"We stopped the collapse. We should avoid the relapse.
It is not time to relax," Lagarde told a group of reporters in the
Washington, DC headquarters of the IMF.
Lagarde said that one of the main challenges facing the
global economy now was the wait for the U.S. Congress to raise the debt
ceiling, or the limit on the federal government's ability to borrow, and agree
on a plan to cut debt and deficit levels to sustainable levels.
"All sides should pull together in the national
interest, avoiding further avoidable policy mistakes, that is failing to agree
on increasing the debt ceiling, on time and prior to that preferably. And
reaching agreement on medium-term debt reduction," Lagarde said.
Turning to Europe, the IMF agreed to disburse another 838
million euros to Portugal on January 16. Lagarde said that the IMF has
presented options to the Portuguese government about how to reduce debt levels
while create openings for the economy to grow. She said the government will
decide how to respond based on its economy's needs.
"We have made a range of proposals, they are just
proposals for the moment, clearly. The Portuguese authorities have to decide
what is most appropriate in the context of Portugal and if they have other
options that are best accomplished in order to both accomplish the fiscal
consolidation and preserve the chemistry of Portuguese society, that is
perfectly legitimate and fine," Lagarde said.
Looking at the Middle East, Lagarde said that the IMF is
keen to support Arab countries in transition, with programs already in place in
Yemen, Morocco, and Jordan. -UNifeed