INTERNATIONAL MONETARY Fund managing director Christine Lagarde has said further action is needed in the euro zone to protect the “timid and fragile” global recovery from “several dark clouds on the horizon”.
Responding to a question about rising tensions over Spain’s banking system, Ms Lagarde called for a change in the way Europe’s bailout facilities are structured so that they can engage directly with financial institutions that need to be recapitalised.
“[Currently] it has to be channeled through loans to sovereigns because that’s the way its been structured ... we are advocating that this be done without channeling through the sovereign,” she said. “We would see that as a move towards stronger and better integration, a stronger and better Europe.”
At an earlier event hosted by the Bertelsmann Foundation think-tank, however, the IMF chief singled out Ireland and Germany for praise for their labour policies.
“In Germany, skilled employees have been retained in many companies. In Ireland, strong incentives have helped train unemployed people and then nudged employers to hire those newly trained individuals,” she said.
