Global Cooperation to Increase IMF’s Ability

The head of the International Monetary Fund (IMF) on Tuesday called for global cooperation to increase the IMF’s ability to tackle challenges, warning that the world recovery remains fragile.

In an address to the annual meeting of the Associated Press in the U.S. capital, IMF managing director Christine Lagarde said the global economy is making progress with encouraging signs of stabilizing financial market as well as stronger growth and employment.

“What is crucial at this point is that policymakers use the breathing space to finish the job, and not lapse into complacency, ” said Lagarde, warning against a false sense of security.

While suggesting that countries with policy room take more actions to boost economy, Lagarde noted that a global undifferentiated rush to austerity would be “self defeating.”

Lagarde said the United States has strong financial and trade connections with Europe whose financial system is still under heavy strain. “If the European economy falters, the American recovery and American jobs would be in jeopardy,” she added.

Lagarde highlighted the role the IMF has played in supporting its members to overcome all kinds of challenges and appreciated the spirit of solidarity.

She welcomed the latest eurozone move to strengthen its bailout fund, saying “the time has come to increase our firepower.”

“The ratio of Fund quotas to world GDP is significantly lower today than in the past. Sixty years ago, it was as much as 3-4 times higher. We’ve a lot of ground to make up,” Lagarde noted.

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