São Paulo – The managing director of the International Monetary Fund (IMF), Christine Lagarde, stated on Thursday (12), in an address Brookings Institution, in Washington, that the world economy is recovering from the economic crisis, but that recovery is “still fragile”. She also said that there is much work to do to stop the crisis worsening and made use of the opportunity to call for funds for the IMF.
To the director general, the situation in Europe is the most delicate and joint decisions in the bloc are the ones that most influence the economic performance. She added that some correct decisions have already helped gain space to “think” about how to proceed in coming months to fight the crisis.
Lagarde suggested that countries need to concentrate their efforts in recovering their banking system, expanding the European fiscal integration and creating the “much expected” barrier for financial protection. This, in her opinion, is not an initiative that should be adopted just by the Europeans, but by all countries. If that is done, she said, it would be possible to create a “circle of protection” against future crises.
Lagarde stated that the IMF needs more money. “To be as effective as possible, we need to increase our resources,” she said, adding that she is being encouraged by demonstrations of support by the member countries of the Fund that are helping the institution collect greater funds.
Lagarde announced that Fund technicians are re-evaluating the risks to the global economy while considering the policies for alleviation of the crisis that have been adopted world over since early this year. “The needs now may not be quite as large as we had estimated earlier this year, but, make no mistake, the risks and the needs are still large,” she said.
Regarding the countries she has visited over her nine months as managing director of the Fund, Lagarde observed that the “human costs” of the crisis show the importance of the economic policies of governments for their populations. “The hardship, the loss of dignity, the economic loss. It is the same in all countries,” she said.
*Translated by Mark Ament
