July 26, 2011Three Ways to Unlock Strong, Stable, Balanced Growth
Global recovery set to post reasonable near-term growth but remains unbalanced Essential that eurozone, U.S. debt problems be addressed quickly.
Middle East events show effects of socially imbalanced growth on politics
Three major challenges—sovereign debt, growth, and social instability—currently confront the world economy, IMF Managing Director Christine Lagarde told a New York City audience.
These challenges are intimately intertwined, and only by solving all three can the world unlock strong, stable, and balanced global growth, she said.
In a July 26 speech at the Council on Foreign Relations, Lagarde stressed that for sovereign debt to be sustainable, economic growth needs to be strong, but in a sustainable way. “And for economic growth to be sustainable, it needs to deliver the stable social chemistry that holds societies together.”
On sovereign debt, Lagarde said fiscal problems in the periphery of Europe had revealed the risks posed by an incomplete economic and monetary union. She noted that eurozone leaders had reached an important agreement, including a commitment to finance program countries until they can regain market access, as long as those programs are implemented effectively. This means that for Greece and other program countries the main priority is “implementation, implementation, implementation.”
read full article ~ http://www.imf.org/external/pubs/ft/survey/so/2011/new072611a.htm
