Europe and US should consider stimulating growth, says IMF chief Christine Lagarde
Baku, September 5 (AZERTAC). IMF chief Christine Lagarde said in an interview released on Sunday that Europe and the United States should consider stimulating economic growth, if the situation permits, to offset a crisis of confidence hitting the global economy.
"Looking at Europe, we recommend countries to adjust their austerity programs to a changed situation and consider measures to drive growth," news weekly Der Spiegel reported her as saying.
"If the United States launches a credible middle-term adjustment program, there is possibly room to abandon the short-term austerity measures and to introduce some measures to drive growth," she added.
Lagarde caused a stir last weekend when she urged policymakers to force Europe`s banks to boost their capital or risk derailing a fragile global recovery, a call she reiterated in the interview.
European politicians last week rejected the call, which would involve raising up to 200 billion euros ($290 billion) in new capital, adding to fears that policymakers may be underestimating the severity of the debt crisis.
Turning to Germany, Europe`s largest economy, Lagarde said its state finances were recovering well, hinting that Berlin may be well positioned to stimulate growth if it is hit by a downturn.
"It all depends on the circumstances, of course. If exports -- the foundation of the German economy -- collapse, the government could push back."
"If Germany stimulates domestic demand, it is good for the German economy and for its neighbors," she added, when asked if Germany should stimulate demand.
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