Euro Zone Needs ‘Special Attention,’ IMF’s Lagarde Says
Wednesday, 21 December 2011 | 11:00
International Monetary Fund Managing Director Christine Lagarde said the euro zone needs “special attention” to prevent the contagion from its debt crisis sweeping through the global economy.
“These are challenging times for the global economy. The dark clouds of risk are gathering, and Nigeria and others in Africa will need to watch them carefully,” Lagarde said today in a speech in Lagos. “While these problems might seem a world away, without action, the world economy could be swept into a downward spiral of collapsing confidence, weaker growth, and fewer jobs.”
No country is immune to these risks “in today’s interconnected global economy,” said Lagarde, who is in Nigeria for the second day on her first African tour since taking the helm at the IMF in July. She is also scheduled to visit Niger, Nigeria’s northern neighbor, tomorrow and go to South Africa in January.
European leaders seeking to tame a sovereign debt and banking crisis pledged yesterday to channel 150 billion euros ($195 billion) to the IMF as the European Central Bank widened its support for sagging bond markets. Four countries, including Denmark, which don’t use the single currency, also pledged contributions.
The IMF is poised to help its African members deal with the fallout by increasing concessional lending and applying more flexibility “with greater protections for social spending,” Lagarde said.
Nigeria, Africa’s top oil producer, needs to cut its budget deficit, reduce inflation and build up its reserves of foreign currencies, to improve its ability to withstand shocks to the global economy, the IMF managing director said.
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