The International Monetary Fund’s managing director, Christine Lagarde, is offering a cautious, but optimistic view of the world economy. She says the world has survived the immediate threat posed by the European debt crisis, but she warns that global economic fortunes remain fragile.
Earlier this year, Greece's debt-ridden economy was the attention of world financial markets as well as hard-pressed Greek workers.
But with the streets of Athens now mostly calm and the Greek government backed by an international bailout, Lagarde said world leaders are feeling some measure of relief.
“As a result, we have seen some improvements in the economic climate. But let’s be under no illusion. The risks remain high, and the situation fragile,” she said.
Lagarde said one of the biggest risks for the global economy is the threat of another debt crisis, perhaps in Spain or Italy. The IMF and World Bank are scheduled to hold spring meetings in Washington on April 20 and 21. And Lagarde urges leaders not to waver.
“The needs today may not be quite as large as we had estimated earlier this year, if only because action was taken by those European institutions that I mentioned earlier. But let us make no mistake, the risks and the needs are still sizeable, and it would be very imprudent to ignore that fact,” she said.
Even as governments throughout the world confront their own debt woes, Lagarde said the International Monetary Fund needs more resources from its 187 member nations to combat future economic crises. She said the cost of inaction could be far higher than giving the IMF more money.
