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IMF Urges Return to Economic Stimulus
Pimperne1
Posts: 2,177 Forumite
http://www.thenational.ae/featured-content/channel-page/business/middle-teaser/imf-urges-return-to-economic-stimulus
The head of the IMF has called on Europe to turn from austerity back to economic stimulus to combat a "threatening downward spiral".
The call highlights growing confusion among policymakers over how to spur growth and solve the continent's sovereign debt crisis.
Christine Lagarde, whose organisation has put billions of dollars into bailouts of debt-ridden European countries, told the German magazine Der Spiegelthe IMF was recommending countries "adjust their austerity programmes to a changed situation and consider measures to drive growth".
That was an about-face from the IMF's stance last year when European countries enacted austerity measures to pay down debts and stave off worries about government finances.
The IMF called the UK's £83 billion (Dh494bn) of public-sector cuts last year "appropriately ambitious", saying the plan "supports a balanced recovery". The IMF's participation in Greece's second bailout in June was contingent on the government enacting austerity measures.
The apparent change in tack comes as Europe and the US battle a new phase of economic danger, coupled with declines in global stock markets, disappointing economic data and Europe's spreading sovereign debt crisis.
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Comments
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the IMF was recommending countries "adjust their austerity programmes to a changed situation and consider measures to drive growth".
Obvious really.
Austerity without growth will worsen the problem. Growth has to be the priority, or austerity is doomed to failure.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Obvious really.
The only obvious thing about it is that the IMF would change its stance when Legarde took the top position. I believe I even stated this would happen when she got the post.
It's her words, rather than the entire IMF in the article.
Her words also state that banks need to build up more of a cushion. Something which I don't believe you will like too much!0 -
Economic stimulus is probably required, but must go into improving the infrastructure of the country rather than improving the balance sheets of the banks."When the people fear the government there is tyranny, when the government fears the people there is liberty." - Thomas Jefferson0
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The call highlights growing confusion among policymakers over how to spur growth and solve the continent's sovereign debt crisis.
There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...0
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